Diversification not necessary unable to achieve with local market. Diversify can be in term of Bonds vs Equity ratio, or different categories of industries. Rules of diversify = not put everything in the same basket, m i right?

I see, thanks for the information. I'm still new in UT and investing either. What i'm trying to say in economic downturn, the diversification is work in UT assume government didn't make significant impact on KLSE. M i right?

I think buy and sell stock incurred brokerage fees either. The reason most ppl invest in UT rather than stock market directly is because of diversification like i said assume government didn't make significant impact on it. For example, one is holding stock A,B,C with the money invested rm10k. Compare with the fund itself with holding various industries and numbers of stock across KLSE. This is the differences. Furthermore, I think if the management of the UT is working, when the market crashes, they can liquidate it faster than the other and keep most money in cash. But I dont really know what happened inside the UT mgmt, that's just what i think they'll do.

Any comment?
PS: UT investor, they have to take note of something with the brochure given by the agent. I think compare to overseas brochure, the overseas brochure return are normally show in annualised return which is different from just calculating
(SP-PP)*unit and find the return. If you annualised the return, you might find that the return from UT is actually very low compare to overseas.

The other thing to take note is that the return from the brochure given by the agent/UT, is NAV with NAV. Meaning it's the repurchase price Over a period of 5 years. But it didn't take the 5-6% service charges which incurred during you buy the trust.
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Dreamers: Personally, i think funds in SG is doing quite well. 1st. They're international trade market, the funds participate in international market and they have more experience in investing overseas compare to Malaysia's UT. M i right?

No. I understand that the fund itself is regulating by SC and trustee. What i'm trying to tell is the fund have a better/knowledgable person who managed it. Or in order word there's a professional team managing your money. So, in a normal circumstances, when the market is not doing well, the fund will allocate fund to shares with higher dividend payout (i think they'll have some sort of defensive strategy in equity fund to prevent too much losing out). Else what's the point of paying Mgmt fees to the fund who cannot manage for you? Like what dreamer said, if the fund is performing worst than KLCI, then why pay for it? I myself can be a fund manager to choose stock in KLCI. What a fund doing is actually minimizing the risk, and maximizing potential return to the unit trust holder.

Another point is that something you guyz seems never notice, the return you see 200%-300% is just something you can see for now. If you liquidate your investment, you get 300%. However, if the timing is incorrect, or you sold after the market crashes, there goes your 300% or sometimes even worst. This is call volatile. UT have better/smaller volatility compare to Share Market.

That's why choosing a good fund manager is very important in the first place. Everything there's a pros and cons, just make sure you benefit the pros most and minimize the cons as much as you could. Then you're happy with it.

This post has been edited by keith_hjinhoh: Apr 20 2007, 07:07 PM

2. UT investor, there's a cooling off period. Meaning, the money is not immediate. They comes within 2 weeks or 14 working days. So, this shouldn't push the fund manager too much in liquidating their potential shares which might gone up higher. They'll just liquidate those shares that not up-to-their-expected return.

3. Fund size there's a limit. No one can continue buying same UT. The offer will closed once the fund already reaches it's limit.

<<How do you make good money when you buy high and sell low??>>
I guess the so called professional management team won't do this, else what for employing those people to look after or invest on-behalf. However, I do think those fund manager have better insider news compare to us (Normal investor).

<<When you buy you own stock, you can buy low and sell high or even better NEVER SELL.>>
Yup this is very true. However, the market is random. No ones know what price is low. You might say $1.00 of XYZ Bhd is worth to buy. But not for other investor. Different perception i think.

This post has been edited by keith_hjinhoh: Apr 20 2007, 09:58 PM

Well all the things I've said is just based on ideal situation where the fund manager really fights for the investor's return. Of course back to the end, it's very important to choose a good fund managers. Even past performance doesn't reflect future performance, yet it's still the best indicators. I do agree with your comments which in the market crashing period (1993-1997), most of the fund perform badly and some even worst than KLCI.

Anyway, unit trust is a good start for new investors.

Other than those points i've posted, I do think UT manager they have the economic of scale, don't they? They deal directly with those securities company and they can buy large quantities of blue chip stock in a significant volume, therefore, they might get better return than ordinary investor?

Any comments?

Is that means actually funds got no benefits from the economic of scale they held?

This post has been edited by keith_hjinhoh: Apr 21 2007, 12:02 PM

Dreamer, I just studied about the Renong, UEM Case. But then I couldn't related much that to the diversify of unit trust. What I could think off is just this is policital risk which exist at any country, and Malaysia share market lack of liquidity. Would you mind to explain a little bit more?

This post has been edited by keith_hjinhoh: Apr 26 2007, 12:03 AM

Since we have no access or limited access to US broker or funds, I guess the best alternative would be a listed companies like Genting, PBBank, YTL where they have their investment all over the world and we're holding a shares in listed companies that have access to all over the world.

In term of asset allocation, too bad, we just can access to our own countries REIT and bonds. Unless we buy mutual funds where mostly charge 7.5% sales charge and 1.25% on annual maintenance.

This post has been edited by keith_hjinhoh: Jan 25 2008, 10:00 AM