U comparing:
Your consultant "friend" - $150K/mth from sales commissions, overriding commissions, assets in management commissions, etc
VS
DIY-funds?

U do know U are comparing business/work
Vs
passive investment returns?

If U do - what's the point you're trying to share ar?
That PM is bleeding their investors to pay agents like your "friend"?


This post has been edited by wongmunkeong: Dec 31 2016, 11:51 AM

Okay la sorry my bad for comparing that way but I just feel there's no need to bash them as they're just trying to make a living. It is not their fault too that fund managers are not doing well. But like I said, the market is still huge for agents in our country.

Just can't stand people giving inaccurate information or being damn vocal about a certain thing without showing results. And don't imply investors with PM are stupid. Like I said, not everyone can DIY like us, successfully.

Guys what are the sales charge fees to enter Public Mutual, and what is the annual MER (Management Expense Ratio) of their funds? Is it in line with other funds from companies like CIMB-Principal, RHB, Eastsprings and TA?

If Public Mutual has higher MER than the other fund companies in Malaysia, that may explain their lower than normal returns.

I think the best way is to educate yourself and buy "open market" funds from the companies I listed above rather than closer market funds like PM.

You need to read their respective product highlight sheet and annual report to find out the SC and MER for each fund

And define open market, because, afaik, pm hass very very very little difference to cimb kenanga TA etc in terms of mutual fund offering

Sales charge for Cash is 5.5%, and EPF is 3%

MER usually its around 1.5%

I still dont understand the concept of dividends dont do shit jack.

I think they update the bloomberg graph dy, sometimes they delay in distribution information

You might need to see PM own performance chart (which do include distribution reinvestment) vs its peers on FSM performance chart to get a apple to apple comparison

In mutual funds, distribution doesn't actually increase your wealth

Whenever distribution declare, it was taken from the NAV, hence NAV reduced by the distribution declared.

You need to reinvest the distribution in order to get back the same fund value as you have before distribution

Otherwise, if the distribution is not reinvest, goes to cash in you hand instead, even though u get the cash, your fund value will decrease by the distribution amount.

This post has been edited by AIYH: Jan 1 2017, 01:34 PM

You are NOT alone,...you are not the first nor the last to get confused.....the only different is you realised and asked....

for Unit trust it is dividend "distributions"....

.......If the fund makes little or no profit, it may not pay out any distribution. Your unit trust investment return refers to both income and capital growth where:

Income return arises from dividends earned on shares and capital gains realized on the sale of shares. The distributions (if any) will be declared at the end of each financial year and will be distributed to investors based on the total units held at the end of the fund’s financial year. The distributions will be paid to investors by cheque or reinvested on the investors’ behalf as per the distribution policy in the prospectus.
Capital growth arises from an increase in the value of the shares in the portfolio. Investors who sold the units at a higher price than the amount purchased will realise a profit and similarly investors will experience a loss if the portion of the investment sold is less than the purchase price.
Please note that past performance, past earnings or distribution record of the Fund are neither a guarantee nor an indication of the Fund’s future performance, earnings or distributions.

Why do unit trust prices drop after a cash distribution?
Income earned by a fund during the financial year is accrued in its unit’s price until the end of the distribution period. Upon declaration of an income distribution, any interest income and realised capital profits are paid to unitholders. Consequently, the Fund’s NAV, and therefore the offer and bid prices, will tend to fall by approximately the same amount as the income distribution.

http://www.phillipmutual.com/help-centre/faqs/

This post has been edited by MUM: Jan 1 2017, 01:49 PM

Franky gave me RM 1,000 to buy into stock market. In exchange I gave him 1,000 units. After one year, that sum grew to RM 1,100.00. His NAV will become RM 1,100 divided by 1,000 units equals RM 1.10 per unit.

I decide to distribute RM 150.00 back to him. RM 1,100 less 150 equals RM 950.00. Hence his latest NAV is now RM 0.95 per unit after receiving that RM 150.00.

But he gave me back that RM 150.00 and Franky told me to reinvest that amount into that same fund.

Hence I use that RM 150.00 and convert it back into units at MYR 150.00 divided by 0.95 (NAV) equals = 157.89 units.

Now, Franky has 1,000 units from his original investment plus another new 157.89 units; his new total units equals to 1,157.89 units.

This 1,157.89 units multiply with RM 0.95 NAV equals RM 1,100.00 in total.

So Franky realised that before distribution, his total unit trust is valued at RM 1,100.00 and total units held is 1,000 units.

After distribution, his total unit trust value is also valued at RM 1,100.00 and total units held has become 1,157.89 units.

To put it plainly, even his units has increased which gives him a "shiok sendiri" feeling.... his total value is still the same before and after distribution. Hence Franky should realise by now distribution does Jack Sh1t.

Xuzen

This post has been edited by xuzen: Jan 1 2017, 05:47 PM

Thanks!

Thanks!

Thanks for the great explanation! But this led to another question; how on earth are we gaining from investing in Unit Trust then???

hope this can answer you....
Your unit trust investment return refers to both income and capital growth where:

Income return arises from dividends earned on shares and capital gains realized on the sale of shares. The distributions (if any) will be declared at the end of each financial year and will be distributed to investors based on the total units held at the end of the fund’s financial year. The distributions will be paid to investors by cheque or reinvested on the investors’ behalf as per the distribution policy in the prospectus.
after the reinvested monies are converted to units...you got more units.....thus any appreciations of NAVs will have added value to the new acquired units thus your total value in that fund.

Capital growth arises from an increase in the value of the shares in the portfolio. Investors who sold the units at a higher price than the amount purchased will realise a profit and similarly investors will experience a loss if the portion of the investment sold is less than the purchase price.
Please note that past performance, past earnings or distribution record of the Fund are neither a guarantee nor an indication of the Fund’s future performance, earnings or distributions.

http://www.phillipmutual.com/help-centre/faqs/

Ok thanks!

Let's take a simple case:

Consider thus Unit Trust Fund A has MYR 100K in its trust account. The fund manager then instruct the Trustee company to buy on behalf of the unit - holders MYR 50K into BAT and another MYR 50K into Nestle.

After say one year has passed Nestle has gone up to MYR 60K and BAT has dropped to RM 45K. Let us assume this gain or lost are inclusive of whatever dividend that have been declared and the fund manager has decided to use those dividend to buy back the same counter in the same proportion for ease of explanation.

Total fund nett asset value (for ease of explanation let us assume the fund manager & trustee all work for charity and there is zero management charge) then becomes MYR 45K plus MYR 60K equals to MYR 105K.

Hence assuming there are 100K units outstanding, the latest NAV then becomes MYR 105K divided by total outstanding units = 105,000 / 100,000 = MYR 1.05 per unit.

So, you will see that one year ago, a unit - holder purchase the units are MYR 1.00 per unit and one year later his unit is now priced at MYR 1.05. ( a simple 5% gain) If he decides to redeem, the fund manager will then instruct the trustee to pay you MYR 1.05 x whatever units you wish to redeem.

Xuzen

I agree that agents exist to serve a market that need their service. But at the same time, I feel that most agents in Msia is below par. Particularly for PM, all they seem to do is to get a list of fund of the month (EQ or balanced funds only) from their upline to promote to their clients. Or when the market is heading south, advise to switch to bond or MMF as temporary measure. What about assessing client's risk appetite, even when market is going up, is 100% EQ funds suitable for most retail investors? What about asset allocation strategy?

Investors with PM are not stupid, a lot of them made good returns in the earlier years. The question is, do they pay attention to the latest developments and choices out there in the market or just trust their agent whole heartedly?

What I attempt to do here is, provide an avenue for people who are clearly not happy with their returns to see for themselves how does public mutual funds fare compared to other competing funds. If they bother to google i supposed

Simple biz thought - all else being equal (ie. gross profits), the winners are the ones with lower costs.

Unfortunately some prefer to "seek alpha" by paying that EXTRA cost for the "brand name" & hoping for alpha.
Is good, is good - else less competition in the fund managers' arena

Oh..so we only gain when there is 'Capital increment'. Is that true?

But do we also gain when:
1. Monthly DCA but the NAV has dropped since we purchased?
2. Monthly DCA but the NAV keep increasing (but we have put in alot of money in, still have to consider as our cost right?). At what stage are we starting to gain as the NAV increment is usually very 'small'.
3. Just buy the fund and never top up?

You seemed a really confused soul

People tell you ABC but you keep thinking about XYZ

Ok, regardless of situation 1,2 or 3, your returns come from increase in the value of the underlying assets as compared to the purchase price. The increase in the value of the underlying assets could be in the form of
- share price increase
- dividends paid by the underlying stocks
- foreign currency exchange gains (in the case of foreign assets)

So can you see that the 1,2,3 situations are irrelevant?

Hi all, I got a question and hope is not out of topic.

I am newbie and planning to join one of UT advisor team under Phillip Mutual which allow me to sell funds from various fund houses. (except PM funds)
Reason is that I want to do some side income and at the same time do my own investment also. I am not quite interested joining particular UT company as they more to product oriented.

Apart from this great thread that I bookmarked and FSM website, where else can I read more about UT?