Basic rule of thumb in investing UT

1. It is the same investing before or after the distribution, it makes no difference.

2. Don't look at unit price to justify, a UT NAV at Rm0.25 is not "cheaper" than Rm1.00.
They are the same.
You own 4 unit of RM0.25 fund A is not better or stay a bigger chance to gain more than 1 unit of RM1.00 of fund B.
They are the same.

3. Fund NAV doesn't magical move on its own, it moves based on its portfolio gain/loss. UT NAV doesn't move like ordinary stock, whereby price can be up and down based on buying/selling demand.
UT NAV moves based on its portfolio worth, not a simply move figure like ordinary stock.

One can say if Fund A Rm0.25 just simply moves Rm0.025, I already gain 10%, but Fund B moves RM0.025, only gain 2.5%. But fund NAV doesn't move by cent, but based on % gain in their portfolio.

If Fund A manage to gain 10%, its fund NAV will move RM0.025, same with Fund B, if its portfolio gain 10%, it will moves Rm0.10.

4. Distribution/split unit is meaningless to actual term, you don't gain anything with it.
Before and after is the same, and it doesn't affect how the fund NAV moves nor it will affect your gain more or less.
Worst still, if distribution needs to be taxed.

This post has been edited by cherroy: Jul 6 2014, 04:19 PM

Opppss, ty for the correction, This year starts already no more imputation system.

When interest rate environment is heading up, bond is not a place one wants to be.

Generally, bond is moving inverse direction with interest rate.

Frankly speaking, a lot of local fund house running on global/regional funds are not performing that good.