The rumour about the change from fixed price to variable price is ridiculous. I work in the industry and personally have many friends working in PNB and ASNB. They wouldn't do something so drastic like that. It would be a disaster.

This post has been edited by Mr Gray: Aug 24 2015, 12:49 PM

For fixed price funds like ASB, ASD, ASW2020 etc. The NAV is kept close to RM1. PNB doesn't give all returns and keep its reserves for precisely this objective. During the crisis in 1997 and 2008. What happens to the NAV? For sure, without the support from reserves, it would drastically drop below RM1. PNB has managed to give dividend every year (CONSECUTIVELY). Fixed price funds pose a lot of risks to the fund manager. With robust risk management in place, it has managed to weather so many crises in recent times, without scathe.

Okay I won't beat around the bush anymore. I work in PNB. So I can assure you the rumour is without any basis, At ALL!

This post has been edited by Mr Gray: Aug 24 2015, 01:06 PM

ASNB manages the marketing of the funds while PNB manage the investment. I won't be able to tell you exactly what the statement means, because even I don't work in the related department. However what I know is that, PNB's bread and butter has always been the fixed price unit trust funds. Even if the world were to turn upside down, and if eventually PNB has to move away from VP funds to FP funds, it would not happen overnight. Plenty of notice would be served.

And for sure, it is not coming anytime soon. We can all think of what will happen if suddenly PNB announces that ASB would be turned to variable fund.

Massive exodus of withdrawals. And we aren't that stupid to allow that to happen.

NAV for FP funds are not allowed to move too far away from RM1. It will be kept close RM1. Too cheap would be very risky for PNB to serve withdrawals, while too expensive would be very costly for PNB to sell something worth more than RM1 at RM1.

Reserves are utilised to stabilise the NAV price. Every year, even if we get like 10% or 12%. We might only give you around 7%. The rest? We keep it in reserves for the rainy day.

A ponzi scheme doesn't promise you only 7% return per year. OPR is at 3.25%, you can get FD for around 4%. Is it impossible to get 7% by investing in the equity market? Ask yourself. PNB doesn't give outrageously high returns. It is something definitely achievable and not out of this world.

Nope, I don't know. It's P&C. But PNB wouldn't vary the dividend rate too much. You can look at historical dividend rate, and see that it's very stable, with no sudden jump or drop. Irrespective of whatever happening to the market.

By the way, if anybody is interested in variable price. You might wanna look into ASN. Today the price is RM0.69. I will be buying more ASN units soon, as PNB has given around 6 sen per unit for ASN in recent years. Gross dividend yield would be 0.06/0.69*100 = 8.7%, way higher than ASB.

And many people are not aware that ASNB uses historical pricing for its funds instead of forward pricing. Most other companies use forward pricing.

Historical pricing: Price of NAV based on the previous day NAV.
Forward pricing: Price of NAV based on expectation of tomorrow's NAV.

Since, ASN has quite a high correlation with KLCI. Don't buy if the index drop, wait for tomorrow.

Today, KLCI dropped by 40 points, mainly because of the huge 8% drop in Shanghai Composite Index today. I'm gonna wait for tomorrow to see how the market goes.

This post has been edited by Mr Gray: Aug 24 2015, 01:58 PM

Personal capacity. Hahaha. Actually PNB staffs can't give comments to the media, without the permission of the company. But since I can be anonymous here. So why not. . And I'm not divulging any P&C matters anyway. And I'm just here to dispel the false rumours.

This post has been edited by Mr Gray: Aug 24 2015, 03:07 PM

Calculation for all fixed price funds are based on average for lowest monthly balance. For every single month, PNB will take the lowest balance at any time within the month. For example, if on 31 January, your balance in ASB is RM30k. Say you withdraw RM5k on 31 Jan, the lowest balance for January therefore would be RM25k.

Say you put that RM5k on 1 February in AS1M. Originally, balance in AS1M was RM1k. The lowest balance for AS1M in February, would therefore be RM1k. If you want to make it counted, you have to deposit before 1st of each month.

Say the following is the lowest balance for every month in your ASB.

January : 1000
February: 1200
March: 500
April: 10,000
May: 500
June: 100
July: 12,000
August: 2000
September: 3000
October: 50,000
November: 50,000
December: 50,000

Assume dividend at 7%. Average lowest monthly balance: 15,025
Dividend= 0.07*15,025=1051.75

P/s. Tabung Haji calculates its dividend the same way as PNB's fixed price funds.

Calculation for ASNB variable funds are totally different. For VP, at any time you deposit the money, even 1 day before the fund is frozen before dividend date, you would still get the whole amount of dividend. Calculation of dividend would simply be dividend rate*number of units.

This post has been edited by Mr Gray: Aug 27 2015, 11:59 PM

Nope. It's not counted that way. ASNB office opens at 8.30am. Before you deposit that 5k, the lowest balance in February is 1k. Doesn't matter even if the deposit is made on 1 February. Because PNB takes the lowest balance at any point in time within the month.

No. I work in PNB. We don't count it like that.

The presenter either didnt know his stuff, or didn't understand what you're talking. PNB doesn't count it that way because it would open up opportunities for people to shift funds every single month between ASB, ASB2, AS1M and other FP funds and potentially could get higher returns at the cost to the company. (Since different funds have different dividend dates)

I've made calculation for all my accounts in ASB, ASB2 and AS1M. And the numbers are absolutely spot on.

This post has been edited by Mr Gray: Aug 28 2015, 12:23 AM

My apologies. I've directly talked to my colleague working at ASNB Product. You're indeed very right wil-i-am. For daily balance, ASNB uses closing balance for that day. Therefore, if you put the money on 1st of the month, that would be the closing balance for that day. If 1st of the month is a holiday eg Sunday, you won't be able to do the same for 2nd day of the month. Ie, you have to deposit before the month begins.

At any time in a working day, say original balance is RM10,000. If you withdraw RM5000 in the morning, and deposit again RM5000 in the afternoon. The closing balance would not be affected, therefore, the lowest balance for the month would not be affected.

Haha no reason. Whenever PNB launches new product, all staffs would get one month bonus in the form of the units in the newly launched product. I only had ASB before. Then PNB gave me AS1M and ASB2.

Can't remember. I think so.

It's quite inaccurate to say the fall of Ringgit value would eliminate all gains, and actual inflation rate much higher than the published one.

For Malaysian residents who invest in Ringgit denominated assets, there's absolutely no currency risk. Why do you bother about the value of Ringgit againts other currencies when you would spend most of it on local products? And if you buy a significant amount of products from abroad, you can only blame yourself for not properly hedging your risk. Foreign currency accounts have been available for quite some time.

On the inaccuracy of the consumer price index (cpi), the common measurement for inflation that's widely used. In the calculation of the CPI, the department of statistics would pick a representative bundle that represent the average consumption for a Malaysian. Every country has different weightage of different items in the bundle. Developing countries like Malaysia usually put food as the biggest weightage in the CPI, followed by transport. For more details of the calculation, you could go to Department of Statistics website.

For any individual, of course the inflation rate is very different from the CPI. Ali may spend more on food, but Muthu may spend more on transportation etc etc.

And A may cook most of his food while B eats frequently outside, while C always go to high end restaurants. Since consumption bundle is different, the inflation rate for different individual would not be the same.

And the CPI is only an estimation for an average Malaysian. There bound to be inaccuracy in estimating data, but no foreign bodies like IMF, World Bank etc have questioned the accuracy of our statistics data, unlike the case with China.

Regarding concerns over the new passbook where there is a column for NAV, even for FP funds. I think it's more of a standardisation exercise. Please be aware that ASNB is in the midst of migrating the IT system for each of the funds. I think it started last year or so. Can't quite remember. The smaller funds are being migrated first. ASB would probably the last, as it has the biggest fund size.

This post has been edited by Mr Gray: Sep 3 2015, 09:52 PM

I'm only 1 year old when that happened. Hahaha. Previously, I think everybody was given the chance to move to ASB, if I'm not mistaken.

No idea. Could be improved a lot more I guess. What about other UTMCs? Is it similar?

Probably since PNB guarantees on the spot redemption for all funds, unlike other UTMCs, it does take time to ensure that PNB has enough liquidity on hand to cover withdrawal when the dividend is announced.

Just a speculation, btw.

. The old IT system could be the reason as well.

This post has been edited by Mr Gray: Sep 4 2015, 11:10 PM