Those are like dividend or income fund. They're committed to pay distribution mainly. Hence, the name of the fund carries the word "income" or "dividend".

1. Hwang Select Income Fund is not available at FSM
2. Sales Charge if u buy thru banks or direct from HwangIM = 3%

But with IRR of 10.7% p.a. (that's what I'm getting, I'm invested since 2008 but have stopped topping up since 2010 when I started investing thru FSM), 3% is not really much, bagi dia lah!

If you're really interested, this is where you should go:
http://hwangim.com/investment-solutions/download-forms

Can set up Direct Debit Instruction (that's another name for Regular Savings Plan for u), every month HwangIM debit your bank account so that u don't need to worry about when to invest, how much to invest etc; just invest every month, and leave the rest to the professionals.

Dave, this statement of yours could start another round of misunderstanding on dividend/distribution

Allow me to elaborate on what does an "income fund" tag really mean...

Since we're talking about Hwang Select Income Fund, I'll just use it as a case study.
- the fund invests in high income-yielding instruments, and they are (1) high dividend yield equities, and (2) bonds
- (1) delivers the dividend income, whereas (2) delivers the interest income
- to an "income fund", income is of primary concern, capital gains are secondary

To an investor like me who elected to reinvest all distributions declared, all the incomes/gains of the fund whether
- dividends received,
- interest incomes,
- realised profit/(loss) on sale of investments, or
- paper gains/(loss) for investments held
are capital gains, for the value of my investment in the fund has grown, there is no cashflow involved.

To an investor who elected to receive distributions in cash, distributions declared are a form of income (cash inflow), gains in NAV price are capital gains. If u purchase Hwang Select Income Fund direct from HwangIM, you CAN elect for this.

This post has been edited by Pink Spider: Mar 25 2013, 10:36 PM

@Pink Spider, I understand the concept on distribution in unit trust.

What I quoted was from the marketing material. Don't flame me!

Personally, I prefer the fund not to declare it and has NAV appreciation.

Aiyo cool it bro

However, the "commitment to make distributions" is very relevant especially to retiree investors who wants a source of income. For this type of investors, basically what they can do is to dump one lump sum into an "income fund" and expect the regular CASH income distribution to sustain their lifestyle.

E.g. upon retirement u have RM1mil, the fund u invested in made a gain of 10% and declares 8% as dividend, that's RM80,000 p.a. or RM6,667 per month! The 2% gains undistributed will be left with the fund for future growth.

This post has been edited by Pink Spider: Mar 25 2013, 10:48 PM

I had chats with several financial planner and they seem to give me some ideas on technique of UT investment:
1. Certain planners would switch from their equity fund to bond fund once they have achieved certain amount of gain and when the price of equity funds drop, they will go in again.
2. Certain planners suggest me to top up regularly so that we can better return.
To all cikgus and sifus here, which one do you all think is much better in terms of return of investment?
thanks again for any ideas and teachings from you all.

Ok so after dividend distribution, you get some additional units and NAV drops. Then after few weeks if fund perform well then NAV increases to the point where it is back to the NAV before distribution. Doesnt it mean you gain some income from distribution?

P.S saya budak baru belajar. Jangan overkill me.

That's why income based funds are not meant for investors like us.

That's only true if you're in bull market. In a volatile market, it's hard to predict or time the market movement.

1. The purpose is to capture or lock the "gain" but you never know when the fund will drop back. Next, there's switching fee involved. Switching too frequent is not recommended.
2. This strategy is called DCA and the purpose is to average down the unit cost price. It is usually when the market is volatile and you have less time to manage your portfolio.

In such scenario, whether the fund makes distribution or not also u will gain!

To avoid confusion, DON'T THINK ABOUT NAV PRICE, think VALUE (no. of units held x NAV price).

E.g.

Got distribution
Before ex-date u hold RM1,000 (RM1.0000 x 1,000 units)
After ex-date AND distribution u also hold RM1,000 (RM0.9091 x 1,100 units), let's assume the distribution u get is 100 units
The fund's underlying investments gained 8% in the next 3 months
Your holdings now: (RM0.9091 + 8%) x 1,100 units = RM0.9818 x 1,100 units = RM1,080

No distribution
U hold RM1,000
The fund's underlying investments gained 8% in the next 3 months
Your holdings: RM1.080 x 1,000 units = RM1,080

Lu ada faham ar?

This post has been edited by Pink Spider: Mar 25 2013, 11:13 PM

Dear David
thanks for the explanation.

Should put this into the 1st page. Are you the TS?

Ok, another FAQ then

Ha.. like that ar? Then what's the point of dividend distribution since units and NAV price has negative correlation?

Go back to my post no. 482 (last paragraph) and 484

Maybe you want to add that to 1st post as well.

Shall I change this thread's name to "Dispelling myths about unit trusts"?

This post has been edited by Pink Spider: Mar 26 2013, 09:39 AM

No need to be that serious.

Just add it to the list of FAQ.

Done last nite

Portfolio IRR dropped from 6.3% to 5.8%...thinking to top up, but this month topped up a lot already

This post has been edited by Pink Spider: Mar 26 2013, 10:12 AM

He should just publish a book ''Dummies on UT''

Yeap.. Hwang Select Bond and OSK Income fund keep on going up while EM up down up down there.