Pop quiz time:

Let's just say a fund price is RM1.00 today. Tomorrow it issue a unit split of 1:1 and the price drops to RM 0.50. Is it bargain time? Want to show hand into it?

Xuzen

Both AmAsia Pacific REIT and AmDynamic ROI are below 5% now. In dilemma again!

i think it is imperative for one to evaluate a mutual fund schemes beyond returns and cost, by taking into account parameters such as the risk of the fund (as denoted by Standard Deviation), risk-adjusted returns (as denoted by Sharpe Ratio), portfolio concentration, experience of the fund manager and host of other research factors. The best deal for an investor will come from a mutual fund that has higher NAV appreciation and Sharpe Ratio and lower Standard Deviation, that are comfortable with the risk profile of the individual investor

YOU STILL DON'T GET IT.

U gave me RM1M to invest. I opened a fund called ABC Growth Fund. I issued 1M units of shares to u. U own 100% of ABC Growth Fund now. NAV of the fund is now RM1.0000 per unit.

I took the RM1M and bought a bungalow.

1 year later property prices kaboom-ed, the bungalow is only worth RM800K. I sold it off. Now ABC Growth hold RM800K cash, NAV price is RM0.8000.

Then I bought a high class luxury condo with that RM800K. But property valuers all say that condo actually only worth RM600K, property speculators goreng-up up the price. Condo market is about to kaboom next.

Mr Smarty sees that ABC Growth Fund NAV price now RM0.8000, he says that it is "cheap", it's a GREAT TIME to invest in the fund i.e. buy over some shares from u.

Who wanna slap Mr Smarty?

And I lazy to elaborate more on dividends, if u still stubborn and think that u are right, so be it.

This post has been edited by Pink Spider: Dec 5 2013, 01:51 AM

Key Investment Themes And 2014 Outlook

In this annual segment, we offer some investment ideas and themes going into 2014

URL: http://www.fundsupermart.com.my/main/resea...?articleNo=4131

This post has been edited by David83: Dec 5 2013, 07:54 AM

Dividends / "distributions"
er.. may i suggest to U to digest the "distribution" (not dividends) portion again on page 1.
From your writings above, it shows that the concept of distribution and its impact (pros/cons) on a mutual fund has not been grasped fully yet.

As for NAV or price:
U do know the underlying assets of a mutual fund makes up its NAV right?
with that concept, then further it as:
a. Fund A vs Fund B
b. both funds have different stocks and if share similarly held stocks, different amount or %
c. given (b.) how is one to compare NAV /price by itself and say one is cheaper than the other?

I've been where U are before - there are more things to absorb and use as we do & ponder.
Some things which was thought to be too theoretical / un-actionable earlier, will dawn on us why and how later
Just a thought

This post has been edited by wongmunkeong: Dec 5 2013, 08:23 AM

thanx your advice

Since 2014 outlook is positive, anyone here started to increase equity portfolio?

I have an idea. Should we create a whatapps/wechat group to discuss about funds and markets? I think it would be interesting to share latest data and news.

This post has been edited by mois: Dec 5 2013, 08:52 AM

i think i get what you guys mean.
Between 2 different funds, we definitely can't say one is cheaper than another, yes i agree .
Distribution or split makes it cheaper - yes i agree too, but you know that is not what i was referring to.


What i was referring to in on one same UT itself and referring to the 'normal' price fluctuations unrelated to any significant underlying changes within the fund itself.

Example:
After you guys experts have chosen that fund to invest and you guys bought it at price say RM1.2876, and when the price goes down to RM1.2545, isn't this considered "cheaper" and i take it as good deal to grab now?

I mean this: Hwang Select Asia Ex Jap Quantum fund was 1.2876 on Oct 21 and now it is 1.2545.
Is this not cheaper ?

Thanks for all the comments, i know you guys are trying to help, dont take this as challenging your authority........., i can see you are all investment experts, very well read.

EVEN IF YOU ARE LOOKING AT ONE FUND, NAV price comparison of today vs 1 month ago or even 1 year ago is meaningless.

Go digest my previous post again.

for ease of discussion, if assuming "no dividend" were issued, just plain NAV movement...then the "BLUE-ED" really make me

if without taking "dividend" issue.....yes, i think i get what you mean by "Cheaper". At times i am also looking at this to make the "go in now" decision.

Unker Looi, re-read my bungalow condo analogy above

Yeah that is what i mean.

Cheaper price already qualified as UNRELATED to any significant underlying changes (eg dividend pay out, distribution, split...)within the fund itself.

Pink Spider should answer on specific example given there, rather than say go digest this and that.

The question is specific. Cheaper or not?

Hwang Select Asia Ex Jap Quantum fund is the specific example i used. It was RM1.2876 on Oct 21 and now I bought it at RM1.2545.

I take it that this is cheaper and now a better buy.

Pink Spider is telling us, NO, the lower price is not actually cheaper, it is meaningless? That means buying it 1 month ago at RM1.2876 is just the same like buying it now at RM1.2545??. Is this correct?

I REPEAT AGAIN

A fund is a fund, it holds many different stocks. E.g. today the fund have Maybank, CIMB, Nestle and Digi. NAV price of the fund is RM1.0000.

Next month, it has Maybank, CIMB, Dutch Lady and Maxis. NAV price of the fund is RM0.9000.

Can u say it is "cheap" to top up now? Yes and no, A LOT OTHER FACTORS TO CONSIDER.

The fund could have dumped Nestle at a (huge) loss, and bought Dutch Lady when it is trading quite high. So, IT IS NOT CHEAP TO TOP UP NOW.

SUMMARY - NAV PRICE IS MEANINGLESS WITHOUT REFERENCE TO THE UNDERLYING HOLDINGS

NAV price behaves very differently to price of a stock of a listed company.

This post has been edited by Pink Spider: Dec 5 2013, 01:57 PM

A bought it at RM1.00 and got 1000 units. After split he got double , 1000 units become 2000 units.

Now the price drop to Rm0.50, using the same amount of money to buy, i got 2000 units, just the same as A.

Cheaper so what? any extra units you get?

1,000 pieces of RM1 note
2,000 50 sen coins

Got difference?

That's unit trust for u.

your point is well taken. So you are telling me when the price drops it ?MUST be something significant happening inside . No such thing as 'normal fluctuation'?

What I am asking is:
WHAT IF nothing significant happened and the price drops? like in Hwang Select Quantum Fund when it drops from RM1.2876 to RM1.2545? This is also NOT Cheaper and NOT a better buy?

Gosh, u cant appreciate that was a sarcastic reply to Xuzen who thinks we know nothing about split and price drop.

There is no way for u to find out whether it is "normal fluctuation" (stock prices went up or down) or "something significant" (e.g. the Fund Manager sold and bought some new stocks) happened. You may be an investor of the fund but the Fund Manager is not obliged to explain and/or disclose each and every investment decisions he made. You can only make a wild guess based on:
(1) fact sheets
(2) general market movement e.g. FBM100 index

This post has been edited by Pink Spider: Dec 5 2013, 02:20 PM