Market wrap for PM


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Market kena diarrhea... everyone so quiet...

Seriously unit trust wont lose much in this diarrhea... the problem is, neither will it gain much during the super bull run, at most 30%-40%. Guys, hold on your horses, its not time to switch to bond fund... trust the CNY bulls to charge after that you wan to switch you go and switch.

i have just finish reading the whole topic,it realy improve my knowledge on unit rust a lot.Thanks for everyone who share!

i have some more question,i note that a lot PM holder here invest in public saving fund-PSF,may i know what is the attractive point of this fund?

in the term of return rate,i think pb growth fund-PBGF is the king among all public fund,howewer i seldom hear PM user mention they have buy this fund here,is that anything we should be aware if we intend to buy this fund?

thanks for help and explain.

Actually it's very subjective because PSF have good reputation and history, that's well many investors pick it.
For PBGF and the other growth funds, the risk is very high and tracking very close to KLCI.
If I am not mistaken, PEF and PIEF performance since lanuching are very impressive also.

This is not local fund, please share how we can buy this fund....

I think Syariah based fund are more stable and less risk as compared to other funds; example will be Ittikial and Asian Ittikial. They're investing in "halal" business (industry).

To a certain extent, its also when the funds were launched and the portfolio they hold. Basically nowadays, fund managers are not like during the early years of Unit Trust whereby they invest a huge proportion into some 3rd and lower liners. Today, pluck into any annual report, you will see the bulk of the funds are in solid blue chips.. I have always maintained that funds with huge investment into sin counters, Tanjong, BTOTO, Genting gets my approval.. . Of course other halal counters like IOI, TGLOVE etc...

Funds launched when the bourse is high... has more risks of downside than funds launched when bourse is humming along...

I think that the fund manager have their own ideas how to deal in this kind of situation also, since the fund manager, you and I also don't know how high the KLCI can hit.
For example, if KLCI continue to hike until 1150 and down to around 1050 again, when is the correct time to invest. I'll say up to your own risk profile and prediction. (Just an example, of course it can happen oppositely)

i want to buy bond fund? any suggestion..

why bond fund? any particular motive?

Bond has a lower risk and I guess it has annualized income.

Thanks for the sharing.i own you a drink

for the start up, i fell globalization and diversification fund will more suitable for me,and currently i not yet have the knowledge and time to invest or perform switching in equitity fund.

This post has been edited by athlon 11: Dec 21 2006, 09:13 PM

Err... annualized income? There is only the % principal growth. Under bullish market condition its equity. But at the current volatile market.. keep it in your bank, if you have alot then maybe overnight money market. If you have excess for long term, well going into bonds is not a bad choice but remember to switch to equity for better returns when market is high.

Alternatively, pick up value stocks from the market right now, some blue chips with high dividend payout policy.

Bond fund or bond won't generate high return rate, most of the time it is slightly above interest rate. You can't compare the return rate with equity fund since they are in different league and risk exposure.

But having said so, bond will perform well when interest rate is on the way down and economy is having recession. So bond fund generally get the return from interest paid out + bond price appreciation due to loweing interest rate. But if buying at the wrong moment then depreciation of bond price will eat up the interest paid out, so bond is a very sensitive to interest rate and economy movement.

Is it a good idea for me to buy bond funds? I plan to buy bond funds and dividend funds in UT, then invest directly in KLSE. Is this idea good?

Or it's better for me to be more aggressive, invest solely in KLSE or buying equity funds and invest in KLSE?

I prefer bond funds, cause the service charge for bond funds are always less than 1%.

This post has been edited by leekk8: Dec 22 2006, 11:08 PM

It depends, If someone got extra fund then there is no harm to diversify some into bond especially current interest rate situation is on the way down (for US). But bare in mind, you can't expect high yield from it, generally about in the range 4-7%.

Generally, it is not worth to invest in local equity fund due to high entry fee of 5% and annual management fee of 1.5%. You already lose out 6.5% when first bought compared to invest directly of maximum commission of 1.2% (assume commission rate 0.6, can get lower with some online trade).

If you are looking at dividen fund then might as well invest directly into those high dividen stock like Carlsberg, Guiness, BAT, Tanjong etc. since those fund also buy these kind of stock. But if one has less knowledge about stock market and don't know how to monitor your investment, UT is the only and better choice since it is better for one to buy UT rather than blindly go into stock market and don't know what he/she is doing.

That's prtially true for what you have suggested but being a beginner or low risk profile investor, unit trust or fund would be a good way to start with. Although it is 5-7% charge per annum but they still can perform to generate gross profit in medium to long term.

If you pick stocks, I am not against too because I am doing that also. In fact, it can generate much higher profit and LOSS as well, depends how you manage it. Frankly, if you have sufficient fund, go for blue chips is not a bad idea.

Actually, the 5-7% charges has hindered the development and raise the popularity of UT. Also, the performance of the funds depends on the fund managers, if you look into details of some of the fund managers, some of their portfolio is awful and performance is quite worst and always underperform. I said this because I made a study previously on some of the underperformed fund and feel a bit shock found out some of those without sound fundamental counters also included in their portfolio.

So choosing which fund or fund house to invest also an important criteria. If not, you pay 5-7% charges and ended with some portfolio than I or you also can outperform them which make the UT investors like a fool. Sound a bit extreme.
Not to pour cold water, just to highlight there is still some bad fund out there.

No doubt, UT is better for those newbie want to venture in stock market but picking a better fund or fund house to invest also an important factor. Another point is the timing is also important factor that make your return rate become more impressive, never buy when market is high.

UT is not as low risk as claimed, equity fund tracks the performance of the stock market while bond fund track the performance of the bond market. Going into an equity fund is as same as buying stock, just you hire a more professional company to do it for you.
But for long term (in term of decades), history tells us stock market (for those blue chips and good managed company, not applicable to those chapalang poorly managed company) is always on the upside together with inflation.

bond has sex appeal

equity i can buy on my own(jimat 5%). and due to current situation, buy equity fund now shouldn't be wise decision.. bond i think onli can buy through fund. and its free. do correct me..



in report when it said that fund make profit 10%, is that mean after it take that 5-7% charge into consideration?

The 5-7% is reflected in the differential in the buying and selling price since you buy at at inflated 5% (if the entry fee is 5%) of its NAV at the first place while they bought back from you at NAV price.

So if it makes 10% through investment (already quite impressive at current situation) then you only gain a few % due to the differentiation in the selling and buying. Below are some simplified scenario

First year (assume fund gain 10% through investment each year) & entry fee 5%, annual management fee 1.5%
Return = 10% - 5% - 1.5% = 3.5%

Second year
Return = 10% + 10% - 5% - 1.5% - 1.5% = 12%

Third year
Return = 30% - 5% - 1.5%x3 = 20.5%

That's why there are some people claimed that UT need at least 2-3 years time or a long term investment since you only can see the real gain after 2-3 years time due to high initial/entry fee. But bare in mind, fund might as well lose money if the market go against, not every year surely gain one.

Quite agree, now it is not the time to go in equity since upside is quite limited, might go higher who's know since market is unpredicated, but not much upside room unless economy situation improve a lot then different story.

This post has been edited by cherroy: Dec 25 2006, 12:44 AM