hi guys i recently joined FSM.

i noticed they have a service named 'Regular savings plan' and as far as I'm aware of, it is exactly the same as buying unit trusts yourself except that your bank acc will be deducted a certain amount every month.

Apart from this feature, is there any other differences?

if there are no other differences, then basically i can manually top-up RM100 per month on my unit trust funds and hence it would be exactly the same. am i right on this?

thanks for your reply David. but i was under the impression that even buying unit trust funds yourself from FSM has low SC up to 2% only?

In that case, it isn't a benefit exclusive to Regular saving plans right?

yup that's what i thought after reading through the FAQs. So basically i can just buy in manually on the 15th every month and in a sense it's already like a RSP - minus the slight inconvenience of clicking a few buttons every month.

Great reply! Thanks j.passing.by!

"Distribution is very relevant especially to retiree investors who want a source of income. For this type of investors, basically what they can do is to invest in a fund that has a distribution policy, and elect to receive distributions in the form of CASH. To an investor who elect to receive distributions in cash, distributions are a form of income, a cash inflow; gains in NAV price are capital growth.

E.g. upon retirement you have RM1mil which you invest in a fund. The fund that you invested in made a return of 10% and declares 8% as dividend for the financial year, that's RM80,000 of cash inflow for you! Of course, when a distribution is declared and paid, the NAV price will drop proportionately. The balance of 2% that are not declared as distribution will be reinvested for future growth."

Was reading the first page and got slightly confused. i have 2 queries:

1. Distributions are a form of income for retiree investors.. but that's only assuming if the fund made profit right?

if the fund that the retiree invested made 0% profit but declare 8% dividend for the financial year, the retiree gets RM80,000 but that's basically his own money from the RM1mil and the value of his investment becomes RM920,000.

2. I was also just wondering why you made the statement that distribution is very relevant especially to retiree investors[U] who want a source of income? as in, why only to retiree investors?

basically dividend can be relevant to anybody as long as the fund is making profit, right? take ur example that i quoted above.. what i'm saying is that the "dividend declared = source of income" in your example quoted above can be relevant to anyone and not just retiree investors.

do correct me if i understood wrongly. still trying to grasp the whole idea. thanks in advance.

This post has been edited by liette`: Dec 29 2013, 03:25 AM

thanks for the reply guys but yours answers are not answering my 2 questions. and basically what you both are saying is what i said in my initial post.



my specific 2 questions were different and targeted towards pink spider since i was quoting his words from the first page. the first two paragraphs i copied n paste from him. it was not what i said. should have used the 'quote' function. my bad.

but thanks anyway!

hi pink, let me know if it's better to PM you or ask you here.



This post has been edited by liette`: Dec 29 2013, 12:37 PM

Thanks Pink, yep it's very clear!

One last question and scenario,

For example:

Unrealised losses: -RM2,000
Realised gains: +RM10,000
Distribution: RM8,000

So the fund is making (RM10,000-RM2,000=RM8,000) profit. and distributed 100% of the gains. in this sense then the dividend is definitely considered source of income right? only difference is that your initial investment remains the same and you are not re-investing your gains.

If this is correct then I guess I have understood the concept!

Thanks!

Yup yup, got it.

thanks a lot really. hard to find forumers who explain in such depth.



This post has been edited by liette`: Dec 29 2013, 02:06 PM

So basically dividends quite redundant.

Scenario A

i invest RM1000 into unit trust with initial price of RM1.00 x 1000 units.

the fund grows 10%. I have RM1.10 x 1000 units = RM1100.

the fund declares dividend of 10%. So it becomes RM1.00 x 1100 units = RM1100.

I opt to get the 100 units dividend in CASH = RM100 CASH.

And I end up with RM1.00 X1000 units = RM1000.


Scenario B

in the other scenario, the fund grows 10% as well. I have RM1.10 x 1000 units = RM1100.

but this fund doesn't declare any dividend. But I can still sell 91 units worth RM100 to get the RM100 CASH.

I end up with RM1.10 X 909 units = RM1000.

Essentially with dividend or not also no differences.

Is the way I reasoned it correct?

This post has been edited by liette`: Dec 29 2013, 03:25 PM

Excellent. getting the hang of it.

Just bought a meagre RM1000 into Kenanga growth fund. Learn more along the way. Thanks again.