Nav RM1.0, 10,000 units = RM 10, 000
after distribution Nav RM 0.5, 20,000 units = RM 10,000
NAV dropped by RM 0.10 = NAV RM0.4 x 20,000 = RM 8,000

Nav RM1.0, 10,000 units = RM 10,000
Nav dropped by RM 0.10 = Nav RM0.90 x 10,000 = RM 9 000

Distribution is a double edged sword?

Ok, so u are assuming a market crash causes a fund's net assets (its holdings of stocks plus its cash) to drop 20%...

Scenario A - Got distribution
After distribution: NAV = 50 sen
Market crash, the fund drop 20%
50 sen - 20% = 50 sen - 10 sen = 40 sen
40 sen x 20,000 units = RM8,000

Scenario B - No distribution
NAV = RM1
Market crash, the fund drop 20%
RM1 - 20% = RM1 - 20 sen = 80 sen
80 sen x 10,000 units = RM8,000

Unker...ada faham ar? Got distribution, u will lose 20%...no distribution, u will also lose 20%!!!

This post has been edited by Pink Spider: Jan 18 2015, 11:07 PM

Yup, that's what I'm thinking also... just want to post it also...

Better to use % instead of NAV coz it'll confused own self only if didnt really understand it...

Not by %...just plain NAV of RM 0.10
I think most people would assume that distribution is extra bonus units one will get to accumulate and future "gain"
Yes, it would be a future "gain" if the Nav goes UP...most did not imagine the opposite.
so, is my opposite theory/concept is valid?

your assumption/theory is INvalid

Always think in %...like kabal mentioned above

This is what i want to post before i saw pink bro's post...



Better compare apple = apple...

what u doing there is u try to compare apple = orange

2 totally different scenario

normally I see the RM value of the NAV up or down....that is how I see the actual profit/lost in my fund. NAV x units = RM

thank u thank u

good to have your different explanation

if not later some stubborn ppl (I'm not talking about Unker Looi) say Pinky is FSM/UT salesman/UT fanboy/Kenanga fund hater etc etc etc

Repeat again, again and AGAIN

Distribution/dividend have ZERO impact on the profit/loss of your UT investment

U got a mooncake
U put on your dining table, exposed
A biawak hanging on the ceiling drop a shit on it
The shit impact spoiled 1/4 of the mooncake

Scenario A - Your wife cut the mooncake into 4 pieces
1 piece of the mooncake is spoiled
U left with 3 edible pieces
3/4 of the mooncake left

Scenario B - Your wife cut the mooncake into 8 pieces
2 pieces of the mooncake is spoiled
U left with 6 edible pieces
3/4 of the mooncake left

I cannot think of any other way to explain already...please kill me if u still don't get it

This post has been edited by Pink Spider: Jan 18 2015, 11:25 PM

for distribution, the RM value will have no difference before and after.

During the market crash and assume all the similar funds' value drop by 20%, an NAV with RM1 will reduced by 20 sen; an NAV with RM0.50 will only reduced by 10 sen.
Similarly, during market boom, an NAV with RM1 will increased by 20 sen; an NAV with RM0.50 value will only increased by 10 sen.

This post has been edited by cappuccino vs latte: Jan 18 2015, 11:31 PM

yes, this I agree...this is before and after distribution...
what about months later....RM 0.1 drop....

this is assuming comparing with another exact fund (Impossible to have, but just for comparing sake) that did not give distribution is also dropped by RM 0.1

Fund A I lost RM 2000, fund B I lost RM 1000

Okay, I give up liao

YES, to both...
what about in value term and not %?

The number of units you hold before and after distribution will be changed.

before distribution, a reduction of 20 sen with 10000 units you currently have will loss RM2,000.
After distribution, a reduction of 10 sen with 20000 units you currently have will loss RM2,000 also.

This post has been edited by cappuccino vs latte: Jan 18 2015, 11:38 PM

see post# 863?..

Ok, I waiting for next BPL match got nothing better to do...I make another attempt...

Let's say we have 2 x Ms Lee Sook Yee
2 x Kenanga Growth Fund
And the 2 funds invest in EXACTLY the same stocks and has EXACTLY the same amount of cash
KGF "A" gives distributions, its NAV is now 50 sen
KGF "B" NEVER gives distributions, its NAV is now RM1

In a crash that wipes 10 sen (20%) off Kenanga A's NAV

It just won't wipe 10 sen off Kenanga B's NAV, it will wipe 20 sen off Kenanga B's NAV!

This post has been edited by Pink Spider: Jan 18 2015, 11:50 PM

Nav RM1.0, 10,000 units = RM 10, 000
after distribution Nav RM 0.5, 20,000 units = RM 10,000
NAV dropped by RM 0.10 = NAV RM0.4 x 20,000 = RM 8,000

Nav RM1.0, 10,000 units = RM 10,000
Nav dropped by RM 0.10 = Nav RM0.90 x 10,000 = RM 9 000 <<< NAV will not drop only RM0.10 in this scenario. It must drop by 20 sen if there is no distribution happen before.

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Example if KLCI drop 5% today, a fund with NAV per unit of RM10 will drop RM0.50; comparatively, a fund with NAV per unit of RM1 will only drop RM0.05.

This post has been edited by cappuccino vs latte: Jan 19 2015, 12:11 AM

Thank you to ALL of you pink, kabal and cappucino for trying to unclog the shit that got stuck in my mind.....now managed to clear the dic head of mine...got stuck in the head for the past 1 hour.

This post has been edited by yklooi: Jan 19 2015, 12:10 AM

yklooi, dont worry, i know what you mean.

as the general impression is -> with dividend distribution, people get more units, so when price up they will gain more.

you are trying to show the opposite, you tell them dont be too happy, you can also lose more when the price drops.

but i disagree with that argument. dropping 1 sen from RM0.50 surely is not the same as dropping 1 sen from Rm1.00. It is a 20% vs 10% drop.

End of the day, I just want to say this to those who don't understand the complex mechanism of unit trust NAV pricing...

Don't even look at the NAV price or the no. of units u have, just look at this - TOTAL VALUE OF HOLDING

Any other thing just doesn't matter at all.

This post has been edited by Pink Spider: Jan 19 2015, 12:10 AM