The performance chart shows the real growth of the fund. It has nothing to do with its NAV price.

The NAV price of UT is not the same as stock price. And "income distribution" is not same as in stock's dividend.
The NAV price is adjusted DOWN after each income distribution. So it is meaningless to make a chart on the NAV price.

The NAV price usually means the price per unit. After an income distribution, and if the distribution is re-invested, you will be getting more units.

Lastly, a Public Mutual bond fund is usually launched at RM1.00. Even if it had grown several hundreds percent, it will not go beyond RM2.00. Usually within range of RM1 plus/minus 10 or 20 sens.

I find it very misleading when sites make charts on NAV prices, and to put NAV prices as a watchlist to time the entry into the fund.

The author in that linked article was trying to explained that the Performance Chart do not includes the service charges. When the service charge is included into your investment to calculate the ROI, there is a difference.

The performance chart shows the growth of the fund at any given time. It shows the growth of your investment EXCLUDING the service charge.


This post has been edited by j.passing.by: Oct 20 2015, 07:54 PM

Better to look at the markets and the relevant indices... a) income distributions distorted the NAV b) forward pricing, by the time you realized there is a sharp drop after the NAV price is released, market could have rebounded and the dip is over.

Unless of course the fund closely mirrors the market index, but we are not talking of index-linked funds but 'actively managed' UTs.

If we set the entry to August level or some lower level... the index could maybe dip and even go below the marked entry level, but the fund could stay flat or dip slightly. Just looking at the NAV price will cause you to miss the dip; and more importantly, miss the rebound and short term gains.

Some see the facts as disjointed, others make their own connections btw them.

I take FD and UT as part and parcel of savings and money management. The wealth is from my earnings and savings. (Hence, I don't mind the entry costs, as long as the returns are good...)

Some take UTs as skim cepat kaya... then they better learned quickly about UT inside and out to get the extra edge to create the wealth.

LOL. There must be some loopholes or some hidden methods that some people got very rich and make their first million from investing in UT.

Don't give up... when the hidden method is discovered, unforeseen riches await!

====================

"16% of surveyed respondents have earned their first 1 million at an average age of 37".

Most likely 100% wiill earned their first million by age 45.

The guesstimate without money spend on expensive surveys:
3k per month + bonus + other income = 40k per year.
1,000k divided by 40k = 25 years
Start work at age 20. By age 45, earned 1 million.

Conclusion: In another 8 years, the other 84% will reach their first 1 million. By investing in UT, the 16% gets ahead of others by 8 years.

Grand conclusion: Actually there is no need to invest into any UT, as all will be very wealthy and rich and had earned millions by age 55.

The dispartity between risk and expected returns is too common. By bringing up a clear cut example on "some investors" cheapens the article. Not worthwhile to ponder too much on what is written. It is all about marketing pr to bring attention to some UT business.

If strictly to the defination and usage of IRR (Internal Rate of Return), answer is no.
IRR is on a series of purchases at various times, and it is the common returns on each purchase.

(When the annualised rate is on a single purchase, CAGR (Compound Annual Growth Rate) is the term; to avoid abuse and confusion btw IRR and CAGR.)

The following figures as an example; with the purchases in negative, and their respective current values:
1/1/2014 1/10/2015 -1000 1150
1/6/2014 1/10/2015 -500 575
1/1/2015 1/10/2015 -500 575
1/6/2015 1/10/2015 -500 575
1/9/2015 1/10/2015 -1000 1150

Note that each of the purchases have the same growth/return/ROI of 15%.
Their respective CAGR will be, using 1/10/2015 as the current date:
8.32%
11.04%
20.55%
51.91%
447.63%

And the IRR is 16.71%.

Q. Does the 16.71% reflect the "true returns"?
A. There is no such thing as "true". IRR is the common representative figure that when applies to each purchases, it will gives the sum of all the returns.

In other words, if the CAGR of each purchase is 16.71%, the current value of the whole portfolio after some calculations will add up to 4025.

Clear?

============

The IRR was calculated using excel function XIRR. The formula is: =XIRR(C1:D5,A1:B5), where A1:B5 are the dates, and C1:D5 are the purchase costs and their respective current values.

Does it has holdings in Hong Kong?
Hong Kong on holiday yesterday, so some funds not pricing on 21-Oct.


You got it right. Was thinking maths logic on "True" or "False" when writing the above 'answers' of whetther it was "True" or not.

IRR is the calculated % on the returns in a cash flow - money going in & out, and gives a good picture of how the returns is doing. Not easy for a single transaction to distort the overall picture.

RHB Asian Total Return:
Price of 0.6208 from the RHB site http://www.rhbgroup.com/products-and-servi...nt/fund-prices/

FSM still showing 20/10 price of 0.6191

- The RHB site has the worse webpage on prices ever!

- It is an income fund feeding into United Asian Bond Fund, based in Singapore. So guess maybe not really affected by holiday in Hong Kong.

- YTD Return 23.52%. Making extraordinary gains from the weak ringgit which dropped about 25%.

This post has been edited by j.passing.by: Oct 22 2015, 09:47 PM

more replies because there is not much else to do... had shut out the noise & did all the buying last month.

i see some locking in profits... i say do nothing and let the profits run!

For a youngster just starting work, I would suggest the following:

1) Do regular investments. This is to form a savings habit, and to know that he is living within his means and there are savings set aside for various objectives, with savings for the long term in riskier investments.

2) UT has risks, while FD is guarantee. No risk, no rewards. Higher risk, higher rewards.

3) Go 100% into equity funds. Forget about bond/equity ratio or any balancing acts, till the time you are middle age with several hundred thousands of ringgits or more.

4) In those savings that are put into equity, choose those more aggressive equity funds, and yet popular and among the top funds that gives high returns.

5) Forget about asset allocation or diversifying the money into every geographical corners of the planet. Concentrate the money into funds that could give the highest possible returns. Be the biggest WINNER you can be and not set a limit because you are too scared to loose the money.

5) But how can money be lost when UT is already a fund with diversify stocks and can be regionally or globally diversify among many countries. Even when countries go broke, they don't just die but recover and grow stronger.

6) And not to forget, this is money you set aside for a long term objective like for retirement. So take the risk and only worry about the money when it had grown very very big as in (3).

7) Even if the returns are not as great as it turned out to be, the money is still a sizeable amount. Very unlikely there is negative growth in the long term.

8) If you still think there is a chance, a very very small chance that the returns can be negative and not willing to take the risk, this is what you should do: stick to FD.

Nothing wrong with local equities as long as they can gives the highest returns in the long term.

But currently the best returns are from global funds. I went in big into PB Global...

Why should he cash out when he already stated that the investment objective is for retirement.

Secondly, if cash out, then what to do with the money. Put into another investment when the 1st investment is doing very well?

It is certainly the wish of every investor that he/she can foresee which is the best next investment vehicle or fund to invest into... wishful thinking and pipe dream.

So when waiting for the next best fund, the money is parked in MM, waiting and waiting... eventually spending so much time in MM that it defeats the original purpose of having money in UT.

(Then switch back, not because of any timing strategy... but because finger is itchy. )

One small cap, and one foreign can do the trick. Pick the best among the best. If feels too risky, pick another 2 funds. Max 4 funds, more will be too diversify and average down the returns.

Can start with one fund, and go into another fund, and then maybe a 3rd fund. Then rotate the scheduled investment into either of them depending on market situation at that point in time.

Where got said one fund only... I said go 100% into equity funds la.

Not 1st time, but many times ledy said this - go 100% into equities. Bond/equity ratio, rebalancing etc. are for senior folks...

That's 'pay yourself first' concept; which, for most people, already in place with EPF - which works because EPF locks the money from our prying fingers. If don't have a monthly budget and no discipline to stick to the budget, any money put aside will later be used up too.

Think a bit about the bond/equity ratio if you are still doing DCA:
- why put money into bond and not in riskier equity (higher risk, higher returns) when you are still making savings in UT and accumulating UTs? The younger you are, the more risk you should take. If young no balls, want to act hero when older?

- Trimming profits and rebalancing from equity to bonds. Should you be doing this? Where's the logic when you are still doing DCA. Take off some this month and buy back later next month or quarter or whatever according to your DCA plan? Is this timing with an objective of making short term gains? But why think of short term gains if the investment objectve is long term? Isn't it more logical to have a long term investment plan if the investment objective is long term?

- If switch out from equity, does it not means that we have bought more equity than we would like to have? And in the first place, is it not already decided how much to buy in the DCA plan? Is it a DCA plan if we flip-flop btw buying and then switching out later? Isn't it a VA strategy for a short term objective?

Nobody, not even the experts will be consesus on how the market be in the next several months. Many investors will be caught by surprise whenever the market goes down; and it will be emotional since this is money and hard earned savings.

DCA is a regular investment plan that could take the emotion away that will hinder investors from continue buying when the market is down.

Find out more about the Regular Savings Plan in FSM that supports this DCA concept...

Maybe 3 ringgit to 1 sing dollar is the correct level that will remain for years; things don't have to be like the stock market where there can be a sharp rebound after each sharp drop, take for example the gold price of 1600/oz correcting to lower than 1200/oz and staying there after the correction.

For years we have higher inflation than Sing, and wage raises in respond to inflation, not due to productivity and efficiency. Like price of chicken rice going up, but chicken rice seller doing the same work year after year.

It would not be right if we, with our higher wages, pay more to the chicken rice seller here, but pay the chicken rice seller in Sing in sing dollar the same cost as previous years. The currency exchange rate is the 'unseen hand' correcting the difference.

The 'unseen hand' cannot be easily noticed. It is never to due one or several factors influencing the market. So don't trust any 'theory' that say that the market can be re-corrected by adjusting or eliminating a handful of factors.

If the forex rate is so easily manipulated by adjusting a few factors, smart people would have done it a long time ago and the forex rate would have been 1 ringgit to 1 sing dollar ages ago.

... says this economist. Think first before you take any advice into consideration, it can lead you to the land of tulips. If you see tulips, don't have to thank me for the directions.

I don't see the rational in insisting that the closing price (on either 29th or 30th) is to compute the distribution units.
The closing price gives the total value of the fund, and is only part of the calculations.

If say we have 10,000 units.
Closing NAV on 29 Oct 0.9054, total amount we have is 10,000 x 0.9054 = RM 9,054.00
reinvestment NAV is 0.8554: RM 9,054.00 / 0.8554 = 10,584.52 units.

Closing NAV on 30 Oct 0.8566: 10,584.52 x 0.8566 = RM 9,066.70

Growth between 29 Oct and 30 Oct: (RM 9,066.70 - RM 9,054.00) / RM 9,054.00 = 0.1403% , even though there is a drop in the NAV price from 0.9054 to 0.8566.

tower? building castles in the air?

more than enough to buy a good morning t... no sweat.

LOL not twin towers meh?

... out of touch and only comprehend 6-packs and buckets... time to go out & travel...