The more correct word should be redemption. *same as sell also.

This post has been edited by cherroy: Oct 19 2007, 10:50 AM

Now most market near all time high, now only allow more can be withdraw to be invested.
No doubt, it is good to have flexibility, if it is done earlier like 2002-2003, a lot of EPF contributors already make a lot of money from it.

About the using EPF to pay housing loan is debatable, has pros and cons.

This post has been edited by cherroy: Oct 23 2007, 03:49 PM

Yes, it is true, the more money the more difficult to invest. We are not talking about millions but hundred of billions.

Thread merged.
As it is talking about UT

Thanks.

The main problem of withdraw EPF fund to invest in UT is that they don't allow you to invest in global/regional funds, only local equities which is not diversified enough. All (local equities fund) are almost has roughly same portfolio across.

Locally bond funds average return for the last few year also not performing well either, around 3-5% also due to low interest rate compared to overseas.
Gain nothing or not much different from it either way.

This post has been edited by cherroy: Oct 28 2007, 10:38 PM

May be your friend want to sell you UT to earn commission from it.

Ask people that bought UT during 1997, how much they earn? After 5 years since 1997 (2002), their investment generally loss 30% or more, only recover since 2005.

In UT, you stand a chance to lose, not sure gain one. Just over long term, generally UT performance is OK but there is not mean future will be the same as past.
So risk is there.

There is nothing bullet-proof investment (except FD or EPF), only those pyramid scheme/scam out there claimed to be bullet proof and guaranteed return rate of 2-3% per month.

There is no such thing of guaranteed return for investment.

A lot of other banks are selling their product also, check with respective banks.

As far as I concerned, there is no pure REIT fund, mostly are property equities fund, although they did invest in Reit, but still portion invest in property stocks including the ING Real Estate, large portion into Reit, while still certain portion in property related stocks. Almost all fund houses got global or regional property or real estate fund, but most of them are having tought time recently due to subprime mess and housing problem in US

http://www.ingfunds.com/v2/investor/conten...spx?f=24&fsc=59
http://www.ing.com.my/INGFunds/Document/Fu...al%20Estate.PDF

Thread merged to avoid to many similar topic.

Most of other fund house sold their fund through bankers. They let other banks to sell it. Unlike PM or PB series of funds, they don't allow others to sell their fund.

Example, one can have the same fund with 2 separate banks.

This post has been edited by cherroy: Dec 1 2007, 12:08 PM

Yup, the ultimate and simple for most important factor to watch is the incremental of NAV over the time, the rest of the like distribution and unit split carry no meaning on it. Don't need to take care of those.

Sadly to say, Malaysia UT doesn't improve a lot. Back 10 to 20 years ago, gov always encourage people to invest in UT so that less people are being burned in the market by blindly invest or only invest in 'goreng' stuff (not invest anyway, should be speculate for better word).
But having said that, there is no move by authority to improve the attractiveness of UT, still the 5% service charge remains the same while UT industry still remain the old way. Now we are talking about online banking in almost every banks, still UT still in a old shape. Also, there is no transparency in UT, you don't know what they are using your money to invest at all, no disclosure of their portfolio either. As a UT holders, we should be at least informed what the fund is investing, at least tell us your top holding position, where it is? Just like yo invest in global/regional fund, you don't actually know where the money has been invested, in US? Europe? what industry?
I don't know how Singapore UT situation, may be bbmars or some other forumers can give more information for comparison or other countries one as well.

Public don't demand the fund to disclose every details about it, as portfoilio can be changing throughout due to market situation so might troublesome to do it as well, just at least annually or half annually disclose simple and brief about the fund situation also enough. Instead, now we only monitor the NAV published daily while the rest we are left virutally blank about it. We also don't know what is the reason of it increases or decreases, somehow when market is up generally, but the fund you invested is down (because of their portfolio surely, just we don't know which one or why).

UT shouldn't charge 5-6.5% initial charge if they sincere about expand this industry and promote its popoularity among public. I know it is always possible to get 2-3.x% if you invested in larger sum like 50K or 100K, but still in lower sum, no discount at all.
Also, still there are plenty of investors here are not aware the risk of nature of UT, they treat it like FD that can give better rate, but not aware their money is actually put into work in equities market. Often you see agents tell people this xyz fund can earn 15% one based on historical performance, you should invest in it, then the investors perceive this can earn 15% in the future and take his/her FD to invest in it.
They also not aware the 5% charges as well in previous UT qouting system.

Still UT industry (including public investors) here is far from maturing even though it is more thean several decades. How sad it is.

It is a well protected industry, and banks and fund houses are earning guaranteed profit from it. The only way to improve it that I can see is improve the competitiveness by allowing more foreign fund house to sell. Just like broadband situation, when it is well protected, no improvement or price competitiveness for consumers, only when the market is opened up, we saw price reduction and better service for the consumers.
The protected industry generally doesn't improve itself.
But I highly doubt gov will do that as it may means severe guaranteed profit deteoriation for local banks and fund houses.

This post has been edited by cherroy: Dec 9 2007, 10:10 AM

The problem of EPF fund invested into UT one, they don't allow EPF contributors to invest in global fund or regional fund only local funds are allowed. You won't get any diversification in local fund as almost all local equities funds have more and less the same kind of portfolio, can't run away several stocks one like TNB, TM, Maybank, Genting, PBBank, IOI etc. Don't see much different between them, may be weighting and positioning a but different from each others.

This post has been edited by cherroy: Dec 11 2007, 03:11 PM

The 3% service introduced by EPF has been ojected by FMUTM, see, told you all already, UT industry is a well protected industry, fund houses are not willing to give out their protected and fat profit of it. Mostly they oppose the move as they said it will hurt their income. They didn;t care how general public 'suffer' the 5-6% charges, they only care about their profit.

Kinda disappointed with their comments, never look for the customers and public benefits. If other countries fund house can earn healthy profit from the 1-2% service charges, why they need 5-6% to stay profitabilit as claimed by them the reduction will hurt their profit.

Is the >10% guaranteed? how about making loss time? Insurance agent also get fat profit from the commission, no doubt about that(But it is a bit out of topic). But currently we are looking and discussing about UT industry and to promote UT investment among the public which in Malaysia still sginficant lower portion of the total investment for the public. It only do good for the market to have more funds in the market rather than retailers blindly invest in unknown territory.

5% + 1.5% annual management means that whenever you invest, you already lose 6.5% for the first year, If the fund making 10% for the year then investors only left with 3.5% for the first year. Remember UT doesn't mean surely profit one, it can make a loss, look at recent launched funds, some did register a more than 10 or 20% losses in the first year.
No doubt it is a long term investment, but taking out 6.5% from it while the investors' money are at risk sounds not fair while fund house won't lose a single cent even they made the wrong decision on investment.

Don't get me wrong here.
What I am not satisfy off is not agents of fund house making profit from the service charges, they still need to make a living out of it, that's fair.
It is the attitude (objection as mentioned) that don't care of investors benefits at all that really disappointing, instead they should always look for lowering service charges to promote the popularity UT investment. If the lowering charges does have significant impact for more UT investment in the future, in the end of the day, agents and fund houses earns more from it rather than less.


http://biz.sinchew-i.com/node/7720?tid=5

This post has been edited by cherroy: Dec 14 2007, 11:15 AM

One must know the last few years of stock market performance (signficant bull run more than 50%) or UT performance, 90% won't be repeating in the next 2-3 years, not every year market will have bull run one.

Don't you think 5-6% is too high already? Fund house can easily make more money by lowering the initial service charges as discussed before. The high service charge is really a big obstacle for public to invest more in it.

Especially when choosing the new fund (old fund, not much problem, we had historical track record to judge the managers performance), for newly lanuched fund, how are you going to know or judge or predict their performance, just based on the name of the fund? Just like China fund, one only knows they will invest in China market or China related company but we don't know which company they are going to invest, how do we choose or judge then? Even market indices can be go up but their invested stock can go down. Just like DJ still stay quite high but Citigroup share has dropped more than 50%.

I had invested UT also, just now don't have already after sold off, my invested fund make more than 30% (net) last year or should be beginning of this year), but for me to re-invest back, the high service charges has make me think twice this time around as equities market won't easily have 20% or more in the next 1-2 years, (although it is not impossible, just more difficult), might as well a negative return if US subprime and credit crunch issue worsen.
Even if market does go up 20% in 2 years time, after deduct (for global fund) 6% + annual management fee 1.8x2 = 9.6%. Total return for 2 years = 20 - 9.6 = 10.4%. It become only 5.2% pa. which other alternative safer investment tool also can achieve that kind of return rate one, why we want to invest in UT anymore in this kind of situation?

When fund generate net 10% return rate for you, they are actually make at least 17% or more already. Don't you think it is unfair for the profit ratio? Make 17% while you only get 10% while the fund house takes 7% while it is your money at risk, not theirs. While making loss time, they still charge the same or gain the same, but investors bare all the losses.

Not mean to disagree with your opinion. Just in investment tool comparison, the charges of 5-6.5% is really really high, moreover, FMUTM think not high though which is really disapppointing.
I know it is possible to get 3% initial service charges provided you invest in large sum (50k or above) which they can give special discount one (quite norm), but it is the small investors that are a bit being 'ripped off' in term of risk and reward ratio.

If fund make loss then charges lesser may be a bit fair, while if funds make significant profit then only charge higher, sound more fair, right?
It is the risk return ratio is not quite right if they insist to charge high initial fee, no matter how the fund performance is.

Just my 2 cents,
Cheers.

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Added on December 15, 2007, 2:01 pmActually both are the same, as dividend declared or unit split or bonus unit had no real material effect on fund NAV as discussed in fund section before.
But
b) has some advantage as dividend or distribution need to be taxed.

This post has been edited by cherroy: Dec 15 2007, 02:22 PM

Just a rough figure.
Global fund charges 6.5% (some 5%) with annual management of 1.8% means for the first year they will take away your money 6.5% + 1.8% = 8.3%. Local fund mostly charges 5%.
Bare in mind, annual management fee is deducted from the fund NAV daily.

They are making profit without risk, that's the main important point. That's why they are eager to launch as much fund as possible.
It is much better than running banking business, as in banking business, the loaned out money still carry the risk of default. In UT, none except those administration fee and company set up expenses.
That's why I don't see any reason why they can't lower the initial charges. If don't want UT holders to switch fund more often, as too frequent in and out of money in the fund can actually disrupt the fund manager strategy, they can do a penalty charges (effective become 5%) if sell a fund let say within 3 months, while those long term investors (more than 1 year just example) are being charged at lower rate (let say 2-3%).

I had seen many agents (not meant all, some are good agents as well) always tell customers to sell those old fund which had making money already one in order to buy the new one. Bare in mind not switching but buy another different fund. But they didn't tell this kind of move, you will loss 5% already.

This post has been edited by cherroy: Dec 16 2007, 10:29 AM

It is not easy for fund to get a 30% each year. Bare in mind recent last 2-3 years of magnificent performance is very difficult (although not impossible) to be repeatable in the future. Equities market won't have 20-30% rise each year if one studies back the historical data of equities market. Long term average return for market is about in mid-teen number which considered quite good already.

That's why sometims high initial service charge ruin the picture and attractiveness of UT. If one fund charges initial charge of 5.5% added up with annual management charges of 1.5%. 7% are gone in the first year.

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Added on December 30, 2007, 9:38 amThen it is your decision in the first place, you bare the consequences.

There is not sure gain in investment, you want the higher return you bare the risk if something goes wrong.

That's why sometimes personally find a bit irritating for agents to tell customers when ask why fund goes down, they will tell you that UT is about long term one, or after long term will gain one, don't worry.
Yes, no doubt about it as UT is about long term investing but it doesn't mean long term must gain one which may somehow misleading. No offence to agents out there as there are lot of good agents out there also.
Just telling UT customers that UT will surely gain over long term is not that right although generally equities market do rise over long term. But it doesn't means it is a must or guaranteed. Even UT is gaining if it is only on par with the return rate of FD interest, it is considered poor already.
I would prefer agents or bankers tell the customers properly and explain the nature of risk if UT rather than a simple word of UT is long term investing so short term losses is unavoidable (this reason is widely common used when being asked by customers when fund making losses time) or over long term must gain one.

If you entering UT at the market bubble or peak time, then your fund will be struggling to find a return. If one invested in Japanese fund (back 1980's when Nikkei approaching 30k mark) or technology fund during 1999-2000 before dotcom bubble bursting time, until now they are struggling to breakeven after 7 years or 15 years for Japanese stock. How much is the return rate for those fund? Breakeven already an achievement for those funds already.

This post has been edited by cherroy: Dec 30 2007, 09:38 AM

Yup, most of time KLSE peak at the beginning of the year then having correction afterwards, although it is not a must of necessary, 7/10 KLSE did peak at the beginning of the year or pre-cny, I think mainly because of portfolio movement or adjustment by fund managers as well as 'new year' money/bonus into the system.