Never thought I will be visiting this thread for a person who completely doesn't believe in unit trust fund and ended up working in one lolz...

From what I heard from a central dealer in a unit trust company, fund managers have been buying high and selling low. Most of the affected funds are Malaysian based with no international exposure. Aside from that the asset allocation has presented fund manager with a major headache, since they are required to observed certain threshold (I.e. 60% equity and 40% fixed income) and maintain a min cash reserve (5%?). To add to the conandrum, external factors are so uncertain with rising interest rates and falling oil prices... I think fund managers are probably pulling out all their hair by now. Hahahaha...

My money isn't in ASEAN (excl Singapore), I believe the future lies with Japan.

I have started to move Malaysian based funds to regional funds until oil prices recover.

Shy to saylar... Haha.. Anyway I work back office only, not the canggih analyst or FM etc...

"Aside from that the asset allocation has presented fund manager with a major headache, since they are required to observed certain threshold (I.e. 60% equity and 40% fixed income) and maintain a min cash reserve (5%?)"...why is it so? isn't it that they are doing that all the time? currently is it all sectors in the m'sian mkts also down? some of the funds that had stocks in hands are not index linked stocks....there are those that have better fundamentals and valuation than others...

Two major problems, asset allocation and the ability to invest only in domestic instruments. As we all know now, Malaysia is one of the most badly affected countries in ASEAN. The FM is literally holding on to instruments that are Malaysian just to satisfy the parameters defined in the prospectus, otherwise they will get bashing from trustee and of course SC or possibly even EPF.

My perception was changed when the US decided to taper down its quantitative easing policy and the signs that the US is recovering. The fear of a US interest rate hike during Q4, which fortunately did not materialize... however may occur sometime in 2015.

Secondly, the KLCI has enjoyed a fairly extended run until the aforementioned event happened. I was initially skeptical but when my portfolio hit deep into the red (worse than my regional funds), it was a sign of bad times to come and that the buffet train might crash at any time. I think the signs are already written on the wall, it just takes the FED to raise the interest rates and everything will come crumbling after.

Thirdly, there is a perception that Malaysian stocks are over-valued (not only stocks, this include property as well! [whereas the gomen is over-rated]. This perception has existed even before the FED made it's announcement, the only question was when the big hit will come.

Lastly, regardless how many good stocks that are being held or purchased by the FM... one thing is true, it's just too little to make a difference to the portfolio due to the restrictions/limitations imposed to avert an over-concentration risk. Furthermore, they can only hold stocks up to about 5% of the fund's NAV. You may capture 1 or 2 good stocks but that won't save your fund from the other 99 bad ones.

Overall, my outlook for Malaysia is dim. I would look for funds that has a regional exposure rather than a concentrated risk in Malaysia. I think the time has passed for Malaysia and especially a weak government, it will only be a matter of time.



"falling oil prices"...some sectors of the mkts like Utilities are benefiting from it....if yr fund is only focused on O&G then sorry lah.

Our country is oil dependent. One hit and everything goes red. Not only that, the gomen budget also get sliced. Gomen has been the main driver of growth, if they get hit bad... what is going to happen to existing and future projects planned in the 2015 budget? There are already calls to revise the budget for 2015, so lets see how that goes.

"I believe the future lies with Japan".....select well my friend....for the yen’s continuing depreciation will harm investment returns after currency exchange

that was one of my concerns but the numbers seem to be telling me something else. This is further cheered on by the fact that Abe won back his two third majority and also recent news that Japan will cut back on corporate tax. Now the only question remaining, can Japan bring itself our of a recession?

I note the Japanese yen has been depreciating, so far the Malaysian Ringgit has been the same thing as well. In fact, it performed far worse than its peers.

I am willing to take that gamble for the world's third biggest economy to recover.

"until oil prices recover"......by then could have missed the upswing of the price movement....

there are about 15 M'sia focused funds in FSM that just -4% for the past 6 months....of course there are also about 17 funds that are minus > 10%....but the average of all 72 funds is about -7.66%.....cannot "tahan" the minor price correction?

When the FED made it's announcement, my Japan fund crashed closed to -10%. I didn't even flinch cause I already saw the potential upside. I believe unit trust is for the long run but that doesn't mean I am in for a mere 6-8% return p.a.

Malaysia at its current course and heading (and gomen), even if you break even it will only give you a mediocre return than what's the point of investing in UT in the first place? Unless there's a a significant change internally, I be reducing Malaysian related funds and search for other regional prospect.

UTs are for long terms ...forget about the minor up/down.....let the FM do their work.....don't jus focus on single countries/sector...have a diversified portfolio of funds.....invest with the monies that one is comfortable with......isn't it that is the basic advise one will get while working in UT industries?

Everyone has their own opinion of how things should function, its for the investor to digest the information and verify it against sources to determine its veracity. Come on, don't tell me you take an agents word as the gospel truth?

That being said, I agree wholly one should hold for long term, forget minor up/down etc...

Just that I don't believe in Malaysia atm.

My biggest fear now is the prospect of Oil price moving up near/at the time of US interest rate hike....Double Whammy.....US stock mkt had not had a good corrections for a very long time....by then one would wished one had moved out of EQ to cash....

Yes, the US interest rate hike is my key worry. My plan is to dispose everything by Chinese New Year (hopefully the Malaysian market will rally for one last hurrah!), after that probably switch over to Singapore or regional or bond funds and throw away the key until something happens.


This post has been edited by aurora97: Jan 4 2015, 10:38 PM

won't not this be a blessing? with monthly EPF, TH, KWAP, Insurance and Financial entities supporting them....

Likely they will step to give an artificial support, that's why i think the growth prospect will be mediocre. Since the monies are recycle within the country, like an incestuous relationship. Besides, who knows one of this fine days they might not be even be there to support the underlying?

Secondly, the KLCI has enjoyed a fairly extended run until the aforementioned event happened. I was initially skeptical but when my portfolio hit deep into the red (worse than my regional funds), it was a sign of bad times to come and that the buffet train might crash at any time. I think the signs are already written on the wall, it just takes the FED to raise the interest rates and everything will come crumbling after.
M'sia also increase interest rate to counter it, the outward fund flow would slow and with the current lower P/E ratios, would it be positives?

Which comes back to the point of hurting the economy. Look at what BNM did to the property market, one interest rate and all property sectors turn red and clam up.

Thirdly, there is a perception that Malaysian stocks are over-valued (not only stocks, this include property as well! [whereas the gomen is over-rated]. This perception has existed even before the FED made it's announcement, the only question was when the big hit will come.
from past incidents,...isn't it M'sia mkt falls due to external factors like....Asian crisis, dot com, subprime etc....even "strong" countries like S'pore was not immune.

I think this time around, it is hurting where it really matters except Asian Crisis. A FM told me, use a ruler draw a straight line compare the RM/SGD and you will see a straight line appear. It has not lost its value against the RM in fact it has been gaining year on year, for what 10 years now?

Overall, my outlook for Malaysia is dim. I would look for funds that has a regional exposure rather than a concentrated risk in Malaysia. I think the time has passed for Malaysia and especially a weak government, it will only be a matter of time.
Yes, go for funds that has a regional exposure rather than a concentrated risk, not only Malaysia......that would be a sounder advise
weak gomen?...aren't the coming GST, cutting of fuel subsidies and other measures are very favorable to investors?

We can argue fundamentals all day. Fact of the matter is, I don't see Malaysia growing. It's still old money being recycled.

Our country is oil dependent. One hit and everything goes red. Not only that, the gomen budget also get sliced. Gomen has been the main driver of growth, if they get hit bad... what is going to happen to existing and future projects planned in the 2015 budget? There are already calls to revise the budget for 2015, so lets see how that goes.
Yes,....the oil prices just dropped for a few months and there are benefits from it too....wait for another 6 months to see how it goes....OPEC and others won't want that to happens too long.

Ok let's wait and see.

I am willing to take that gamble for the world's third biggest economy to recover.
wow!! notworthy.gif you are one Brave investor...hopefully not more than 40% of the investment.


I ain't that ballsylar

Portfolio one:
Japan Fund - about 27%
Domestic Income Fund - 50%
Domestic Fund - 23%
(overall small +)

Portfolio two:
Regional Fund - 68%
Domestic Fund - 32%
(strong single digit +)

If i had invested more than 40% of my investment in the Japan Fund... I would laugh my way to the bank.



Yes, the US interest rate hike is my key worry. My plan is to dispose everything by Chinese New Year (hopefully the Malaysian market will rally for one last hurrah!), after that probably switch over to Singapore or regional or bond funds and throw away the key until something happens.
Yes, ...same thought here....but I would move to FD (ambank now offering 4.5%pa) instead of bonds...because both bonds and stocks can fall badly at the same time too. (mid of 2013)

you sound like you have no confidence in Malaysian market as well. Anyway, fingers crossed.

I hope your a licensed person selling a license product issued by a licensed entity regulated by BNM/SC.

It's this type of news that leaves me unnerving with anything touching on Malaysia.

www.themalaysianinsider.com/malaysia/article/3-ceos-3-auditors-2-chairmen-in-5-years-and-still-nothings-wrong-at-1mdb


The silver lining, its interesting to see Malaysia juggling between so many issues ranging from political, oil, sovereign fund, lower export, lower commodity prices, threat of us interest rate hike and a sputtering growth.

The only question now is when will there be blood on the streets and swoop in on those Malaysian funds again.

This post has been edited by aurora97: Jan 6 2015, 10:02 AM

Gomen won't let it default but the jitters it will send through the market is akin to shaking the tree and scarring the monkeys.

I would say, if one has fresh funds, can start looking for some nice performing local funds with track record. Like KGF and EastspringSC nom nom nom...

Current FM for KGF, she is I would say living off someone else’s legacy. She will need to prove herself in the long run.

Whereas ESSM, is run by the former FM that made KGF today.

The only difference being the asset allocation structure. I think in terms of catching the boat, KGF will be in pole position (since they can have up to 25% liquidity) as opposed to ESSM with a mere 1%. Don’t forget that the Fund can also have another additional 5% grace but may need to rectify within a certain duration.

As market turns for the worse, I think ESSM will be the first to see blood.

Those are signs that have been written on the wall for quite sometime now...

The one that I am betting on is PM's resignation. I don't think he will survive 2015 and general election will be brought forward.

This is the ultimate dooms day scenario.

Looking for more Asia Pac funds to move to, maybe some US funds as well or foreign currency denominated funds (SGD,AUD etc). Even if foreign currency fund is flat lined, at least still can hedge against RM's depreciation. I am still betting on SGD as a safe haven in the interim but its so high now... AUD is alternative. Apparently, Australia is facing a commodity glut. The currency seem to beholding in the interim.

any thoughts?

very helpful indeed!

I note whatever that was said above.

This is my perspective. My investment horizon is between 3 to 5 years. Also, am looking at Asia Pac (ex Japan) or Japan Fund exclude Vietnam, Myanmar, Malaysia and Philippines.

There’s a certain criteria I personally look for in Funds that invest in the above countries:-

(a) room for growth
- Indonesia for instance - Jokowi’s government has indicated intention to improve on infrastructure.

(b) benefactors of low oil price
- Indonesia – it’s large swath of land/sea remains unexplored for oil and gas. When oil prices were high, Indonesia suffered greatly. Jokowi did indicate his intention to cut subsidies. This was highly unpopular. Fast forward to now, other than AirAsia incident, there is no reason not to put half a smile on Jokowi to dedicate monies saved from subsidies and translate them into nation building projects.

© future plans
- Japan had given its current PM another extended tenure in office in the recent snap poles. A sign of confidence in abenomics? At least it’s not Najinomics. To spur growth the government decrease corporate tax to enable corporates to continue to expand (notwithstanding consumption tax has been increased). Weak Yen (down approximately 10% against the RM?... LOL) has also helped to encourage export. Finally of course, the summer Olympic in 2020.

(d) growth + oil = higher corporate earnings
- with the government ploughing monies back into the economy (whether monies saved from oil subsidies or quantitative easing measures), there will be growth and this ultimately will translate into corporate earnings means employment and lastly taxes.

(e) Service, Consumer or Manufacturing sector (excluding banks)
- Unless its aviation industry related, I think a country that relies heavily on services and consumer sector will come up on top out of this muck. In Malaysia for instance, CPO prices have rallied because of a weaker RM.

(f) Commodity
- I believe at some point Oil Prices will recover, a long investment horizon of perhaps 3-5 years in an Australian based Fund should add some colour to one’s portfolio. If that’s not enough, buy into Australian Dollar Denominated Funds (1 AUD = 2.9 RM). There’s weakness in the Aussie dollar, in my view should recover in tandem with oil prices.

My Fun picks:-
(a) themes:- Asia Pac (ex Japan), country specific (Indonesia, Australia & NZ, Singapore, Japan), currency denominated (SGD only.)
(b) pick Asset Allocation that would enable high liquidity as defensive play, up to 30%. This will enable the Fund to turn around quicker when the market recovers (hopefully the FM knows what he is doing).
> example certain fund can invest 99% in equity with 1 % cash in hand.

Am guessing only...

Index funds, the fund will buy all the shares that forms the basket of the composite. It attempts to replicate the performance of the index.

Equity fund, practically no restrictions, as long as it is shares and it fits the parameter of the fund. The fund will pick it up. Equity funds normally try and outperform the index.

There's probably more equity funds out there as opposed to index funds.

This post has been edited by aurora97: Jan 9 2015, 12:24 PM

Lol... If not depend on fund management then depend on?

Anyway, it all depends on our risk appetite and investment horizon.

Companies that form part of the basket in the composite r generally matured companies with no room for growth and established in their own areas. Nothing exciting happens. Returns are generally stable or flat.

Non index funds, there's practically no restrictions. The company can be a piece of junk but if the fund manager thinks it has potential for growth and fits the funds OBJ, he will go and invest in it.

Listen to what she say first and then balance it against your expectations , btw do you have a link or materials for me to read up on our fund?

not too sure about the fix income part... anyway lets presume all Fund Manager's do their due diligence to mitigate the risk of default in bonds.

Next before you invest in unit trust fund especially the funds that you don't know... ask from Agent what is the name of the Fund, so you can do some research.

That HLB agent is selling u some funds that belong to other fund house. Coz i check Hong Leong Asset Management website (http://www.hlam.com.my/Retail-Solutions/overview), they don't seem to have any index fund.

(a) I googled, this product is an investment linked fund sold by HLA.
(b) the underlying is an FRNID issued by CIMB, can see from Fund Fact Sheet.

What I don’t like about the product. The fact that I have to pay upfront management fee, the manager already sapu my duit for next 20 years even before he does any work. The duration of commitment is so extensive that by the end of 20 years, a lot of things can happen. What if CIMB or HLB goes bust? Unlikely to happen, that’s what they told me about Lehman.

From the Fund Fact Sheet, I noted this Fund invest in FRNID issued by CIMB. This suggest that HLA actually purchased a structure product from CIMB, they are effectively on-selling to end Clients. The upfront fee is high, this is probably because HLA may be shifting the cost of purchasing the note to policy holders or perhaps to retain profit sharing ratio. In addition to that, the issue price will be significantly different if there is some form of guarantee involved (example at the end of 20 years, to sell the Fund at highest rate achieved by the Fund) or principally protected until maturity (as noted in the Fund Fact Sheet. Note it doesn’t if its principally protected when there is occurrence of a withdrawal i.e. you may not get dollar to dollar value, you might be penalized on exit.), this features will entail additional cost.

Essentially for a policy holder, you betting within that 20 years there will be a super bull run and the policy will achieve a super peak. Now the question is, if there was a bull run wouldn’t my unit trust or shares perform just as well without the aforementioned restriction? Also, why should I pay so much for so little and for so long!

Also check out an interesting discussion in the following link, I haven’t finished reading it yet…

Start from post #2630
https://forum.lowyat.net/topic/2722457/+2340

My conclusion…

This product is not worth it. Too many uncertain variables.

@kimyee73.

realistically who reads from the beginning of the thread.

To be safe just address the person according to their forum name, you 110% will not go wrong unless you typo the fellas name.

subject interest, item highlighted in bold.

According to the Fund Fact Sheet, the Fund is principally protected until maturity by CIMB.

This is what I found in PIDMs website...

http://www.pidm.gov.my/For-Public/About-De...urance/Coverage

COVERAGE...

A storm is coming...

www.thestar.com.my/Business/Business-News/2015/01/17/Unfazed-by-market-swings-Fed-sticks-to-mid2015-hike-scenario/?style=biz

I can tell you all RM are driven by commission. They probably even pitch more of a particular fund, given the fact that a fund house gives them higher commission. This is human nature. Nevertheless, one would be a fool not to do a due diligence on the investment advice provided. It’s your hard earn money, it can easily turn into someone else’s lunch money.

Anyway the rule of thumb is…

If you want a banking product go to a bank. (yes, banks do try and sell you unit trust)
If you want insurance go to an insurance company. (note certain insurance sell investment linked product)
If you want unit trust, go to a unit trust company.

So on…

I really have no faith with any product that is sold by an institution beyond their specialty.