Personally think that now it is not quite suit to switch to equity fund, a bit too late. Stock market already had a nice run up, although some said there is still some room for upside but surely not much to go at least for the short term period.
Also, bond has not doing quite good for the past 2-3 years due to series of interest rate hike so not much gain that can be locked upon.

Personally think that currently should reduce equity exposure and wait for new opportunities.
Anyway , it is just personal opinion.

For balanced fund, normally its performance won't as good as equity one since for balanced fund, normally about half portion of the fund is already putting in money market instrument like FD or bond that earn steady yield while another hald portion is investing in equity.

For newly launched New Stars Fund, it mainly invests in newly formed company or newly listed company especially those IPO in stock market if not mistaken. Personally don't like it since it is more risky than investing in those established and old blue chip company. But again high risk high gain, so it is based on one risk appetide.

Friend, this is 'Global' New Stars fund, not locally.

Also it will invest in newly listed company which is being listed less than 3 years or so (of not mistaken as their prospectus, does not necessary mean that need to buy through IPO only.

Another point is that last year 2006, KLSE IPO mainly consists Mesdaq and some smallcap company while MEsdaq was having a run in the beginning last year so there is no surprise a lot of Mesdaq IPO was having quite success story.

Generally, when market is having a bull run, IPO normally will do very well while when market is under bear mood, a lot of IPO open to trade below its IPO price which happened quite frequently during 2002-2003.


This post has been edited by cherroy: Feb 12 2007, 08:58 PM

Some may use bond fund as a 'parking place, ok, fair enough especially when equity is a bit high.
Generally, bond fund is more suit to be invested when interest prospect in on the way down while equity also has little room for upside so people will start to look for alternative that are stable and relatively high investment like bond. Don't get me wrong here, I mean relatively high mean that it is higher than FD rate but not as high as equity performance when equity is having good time.

Bond fund generally yield from in the range of 4-9%. If you look for double digit gain one, sorry, bond is the wrong place.

Bond is quite sensitive to interest rate so whenever interest rate is on the way up, stay away from the bond as simple as that.

Index faces some resistant at the level around 1260 and some heavy weight starts losing some steam near this level.
Difficult to tell whether the market will continue the run after CNY but volume is a bit too high currently which is not a healthy sign especially majority of the volume concentrates on 'tips' stock.

Always be cautious, don't play too 'big' in this kind of market. The run can't last forever non-stop one.

I refer 'Tips' stock is as rumour stock that syndiate is behind to 'goreng' while spreading news so that people will chase after it.

1260 because previous attempt fail at this level and today also face some resistant when approaching that level, also from some long term charting indicator.

With current valuation, KLSE is not cheap, yet not too expensive also. Whether the market can go further up or not, it depends on the earning growth and how well they performs especially those heavyweight GLCs.

Actually domestically economy is not as good as it seen, major earning growth for TM, Maxis, YTL, even Maybank come from overseas operation, domestic business hasn't growth that much.

Current market of 'goreng' is not sustainable, it depends on hot money and retailers greed. It will soon end in one day. (I refers to those 'goreng' one not blue chips stock). When you see the 'goreng' stock that up 20-30% per day one, it hardly has any fundamental to support its share price, some registered losses years after years, worst still their warrant that totally way out of money still people want to buy or to chase, not make sense at all.
But I am a bit surprised that a lot of so called expert analysts didn't highlight the issue and still encourage people to buy into this market.

Actually, balanced fund has one disadvantage, it contradicts itself since about half of the portion is invest in bonds and half of the portion in equity.
Bond price and equity price normally move in opposition direction due to favourable of asset allocation so normally when stock is doing good then people will dumb bond and vice versa. Just like recent stock market crash, bonds up significantly since people move their asset to more secure one.

Also, if you want to diversify better buy one equity fund and one bond fund rather than balanced fund. Since balanced fund entry charge as same as equity fund 5-6.5% while only offer you half of the exposure in equity. Meanwhile bond fund normally entry charge only at around 0-1.5%.

So if you bought balanced fund, entry charges = 5%

if you split your initial fund that was planned to buy balanced fund to buy one equity and one bond fund.
Your entry charge = 1/2 x 5% (equity) + 1/2 x 1% (bond fund) = 3%!

Seems like pyramid scheme, nothing else.
There is no free lunch in the world.

Regarding capital guarantee fund, I think there is some mis-conception among the public. They just think it is capital guarantee then no need to worry, only half correct.

How they achieve capital guarantee fund? Normally, they will invest 85% in gov bond or something like that let say MGS or (gov bond that yield 3% currently) so after 5 years, it will achieve the capital protected objective then the other portion 15% will be invested equity so even the 15% loss totally (unlikely) still you will get back the initial capital through the bond (85%). If the 15% equity portion doing very well then you will get more return rate (that's the part that the fund will earn)

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

Normal mutual fund cannot use leverage to invest more than 100% its got but hedge fund can that's why hedge fund can move the market quite quickly since one dollar can equivalent to the 2 dollar or up to 10 dollar of force through leverage and futures market.

Mutual fund must put a certain % (0.5-5%) in cash so that whenever the unit trust holder making redemption, they need not to sell their portfolio to raise cash to pay back to the unit trust holders.
Mutual fund can't have too much cash in their hand, they need to invest according the trustee agreement, no matter the market is sky high, they need to invest also, just may be a lower percentage of their portfolio.

It Cannot Be. If the fund house is like that better close all the account with them and complain to BNM or relevant authorities. It Is your Money! They can't reject your redemption!

Even for structured product that last for 3 years or 5 years, yoou still can cancel it halfway, just you need to pay some penalty.

There is no such thing investment that can't allow you to take back your own money!

The Hwang Global Property fund is much better, last year launching Rm0.50, now approaching 1st fully and become 0.60(buy) - 0.63(sell)

Offer or promotion is depended on the selling partner like banks or fund house. When this fund launching time, got extra unti as high as 3%.

Ya, i noticed that PB and public global and regional series not as good as others. They invest directly rather than feed into others established fund?

As far as I know most of the global fund launched by Hwang, CIMB, OSK are feeder fund that invest in others established well known fund. But I seldom heard and don't know much about PB global fund. Domestically, PB fund is quite impressive but for global fund, it looks like lag behind others as far until now.

You would have plenty of disastrous if 40% is your benchmark. Over the long term 20 years, stock market and unit trust give your an average 10-20% return rate per annum.

Stock market won't go up 40% every year, bull run generally last about 1-3 years although it is not a magic number, prolonged bull run wil led to overpriced stock market due to bullish sentiment and over-optimistic.
Bare in mind, this year everyone expect a much slower growth worldwide. Stock market recent uptrend is mainly driven by too much liquidity worldwide not purely because economy growth.

Medium economy growth + too much liquidity = bull run (current situation)
Strong economy growth + too much liquidity = super bull run (1993-94 prior crash)
Recession + liquidity shortage = crash (98-99)

Equity unit trust is as same as the share. They used the fund money to invest into share. Whether the unit trust NAV move 'big or not is related to its portfolio value.

The movement of unit trust is not so obvious is because of their portfolio which is more diversifed and mainly hold some blue chip (some fund not depends of fund type and its manager strategy). Normally, large cap and blue chip movement not so drastic compared to those 'goreng' and small cap and with diversification, it average up more with lesser movement on its fund performance unless all its portfolio goes up dramatically altogether which seldom happened.
Like even index hitting new high, still some stock like Maybank still doesn't go up.

It depends on which type of fund, there are some fund heavy on Europe, some US, some mixture, normally global fund is a feeder fund that feed into others mostly developed country fund like Templeton, Henderson etc. Check their fund portfolio will know.

It is much better to invest into global market especially those dveloped market like US and Europe than local fund. You will get real diversification as Dreamer said. KLSE market is too simple and lack of choice sometimes. Just last year or so, only local fund outperform global fund due to catch up play by KLSE. For long term (10+ years) global developed market still outperforms KLSE way way ahead except certain counter like Genting, IOIcorp, a few more, not many.

Eg. You bullish on crude oil but in KLSE, there is no single counter that drill oil like Exxon, Shell. Even listed in KLSE of shell is just a refinery business, not related to crude. A bunch of oil related company listed in KLSE is oil servicing company.
When you bullish on gold and comodities but KLSE also had none of it. So if you have explored other major bourses then you will find local market is just so small and lack of choice.
If you want to buy blue chip in Malaysia, I think it won't be many although current got 1000+ counters but real quality one is just a few.

This post has been edited by cherroy: Apr 19 2007, 02:51 PM

Unit trust (equity) is as same as investing in stock market. They used your money to invest in stock market.

I think people have wrong perception it is safer than stock market because 80% of the retailers in KLSE like to buy those 'goreng' stock that's why it is different than unit trust since unit trust managers normally (it depends also) buy those blue chips and more based on fundamental compared to retailers who always like to buy those tips and rumour stock.

If you know how to invest and have sufficient fund to do it yourself, it is much better than unit trust since you don't need to pay 1.5% management fee annual and 5-6% entry charge. If you have discipline and knowledge about the stock market based on fundamental, you can easily also surpass their performance also. Discipline is also a key to success in stock market.

brokerage fee 0.42-0.6% x 2 (buy and sell) is minimal only nowadays compared to UT entry charge. Also investing on your own, you get the dividend directly from the stock also liquidify also faster than UT redemption (T+3). Yes, you might get the diversification from UT but as I said before if you have sufficient fund you also can diversify on your own but remember always invest based on fundametal.
But too broad diversification also not good, stay in range of quality stock will do.

Too broad diversification sometimes mean average performance only just as KLSE index shown if yo buy CI (diversification 100 stocks) compared to just Genting, IOIcorp, Bat etc, eventually the three stock outperforms the CI at least 100-200%.

Another point of wrong perception is that fund can keep most money in cash. A fund can't have too much cash in their portfolio since it will violate objective of the fund and trustee agreement. Even though they know current market is high, they can't liquidate totally, the most they can do is liquidate a portion only or switching stock and for equity fund they can't switch to bond either. A fund simply cannot has more than 50% of the money in cash (for equity fund).

Dreamer is right on the fund manager side. When the money come, then the fund manager needs to invest and when people redeem they need to sell. They can't do much about it, they can just try their best to manage the portfolio so that stock pick is quality one and will generate better return.

There are still a handful of fund especially local one that are underperform, research around you will know. Fund house only takes good number to show to their customer but ignore those perform badly one or perform bad during a period of time. Take fund performance from 2003-2007, surely almost all register hefty gain due to global stock market rallying, but if you pick period from 1993 until now (2007) then you will see big difference.

No doubt there are some good fund or fund managers around that generate good return but not all, bare in mind. They might be professional but they are human also and might have same financial knowledge as you and me.

I am not saying investing in UT is not good, instead it is a not bad investment option or better for those not familar with stock market. But not all fund manager is as good as you think. There are pros and cons, no doubt.