RHB Asian Income, RHB Asian Total Return (fixed income) they were below my radar previously. For better or worse, my prejudice with bond is that she is boring and as beautiful as my 90year old Granny. But after re looking at them, they do present some interesting numbers.

I will, in my free time, throw these numbers into algozen™ and see whether they can be part of a good portfolio or not... watch this space.

Xuzen

My port just recover from the China Fiasco... now its ROI is +1.89%. It took about three mths for it to come back to positive territory. F3cking SSE!

Xuzen

This post has been edited by xuzen: Oct 8 2015, 11:12 AM

I was tempted to write a simple yes / no on the bond fund as part of the portfolio but my educationist in me compel me to write a longer "cheong-hei" piece for educational purpose.

I) Inveesting is an art. In art first we are taught to draw a line. A line is one dimensional. In investing, the first line / dimension we learn is Return of Investment (ROI) =



II) Once we are good, we learn to draw a the width and length to make a simple diagram, e.g., a rectangle (two dimension object). In investing, the second dimension is time. ROI per annum also called Compounded Annualised Growth Rate (CAGR) / Internal Rate of Return (IRR).

III) But in real life, object are 3D, never 2D. So in art we learn to add depth to a drawing to produce drawing and the outcome is a 3D drawing that create realism. In investing, the 3D is risk. The conventional way of measuring risk is taking the standard-deviation (Std-Dev) of a series of measurement over a defined period of time.

---- to be continued ---

Continue:

IV) Now we are aware of the 3D of investing, let's move on to the fourth dimension. In art, it is called colour... coz in the real world we look at things in colour, not grey scale. In investing, when we start putting different risky assets together, we call it a portfolio. ROI, risk are parameters that are good for choosing one single asset. But when you need to put a number of assets together, you need another parameter called correlation coefficient (greek symbol is Rho).



Now that I have given you all the theory, let's move on to the gist of what I want to say....


RHB Asian Total Rtn and RHB Asian Income on its own are good fund if seen from its risk to reward ratio. But when I throw it into Algozen™, it got spit out because they are too highly correlated to Ponzi 2.0. Ponzi 2.0 is still by far a more superior fund compared to the RHB ones, it reject the former in lieu of for Ponzi 2.0.

In conclusion; Algozen™ still maintain Ponzi 2.0 + Titanic + small cap for the best diversification.

RHB emerging mkt bond fund is not considered at all because it does not have long track record hence automatically excluded - Avangelice you owe me a beer!

Xuzen

This post has been edited by xuzen: Oct 9 2015, 11:01 PM

I am topping up on Ponzi 2.0, Small cap & Titanic on Monday!

Xuzen

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This post has been edited by xuzen: Oct 10 2015, 10:30 PM

FM of Titan & Ponzi 2.0, "Da'fuk! WTF suddenly so much cash coming into my fund! Mommy! What am I gonna do now?"

I checked at FSM website, in 1 week historical data:

I) Titanic dropped 3.21% (CIMB-Principle Global Titan Fund)
II) Ponzi dropped 2.88% (CIMB-Principle Asia Pacific ex-Japan Dynamic Fund)

but

III) Small-Cap up 1.45% (Eastspring Investment Small-Cap Fund)
IV) Lee Sook Yee fund up 2.21% (Kenanga Growth Fund)

Diversification in action.

News will always be there, background noises will forever be present. What we as rational investors can do is to shut out the noises, place our bets at the most optimal risk-adjusted return position and wait for the profit to roll in.

Xuzen

This post has been edited by xuzen: Oct 14 2015, 02:32 PM

Check back post Nos: 256 again for amendments. Thank you.

Xuzen

1) In the long term, a good fund will give +ve ROI (all of them) - if lousy funds, the veteran investors here at LYN FSM thread would avoid it like the black plague and would have advised accordingly.

2) In the short term, the +-+-+- will reduce (NB: cannot completely cancel) the portfolio ups and downs giving you a smoother ROI curve. A rational investor wants a smooth and upward rising curve. He/she will try to avoid a jagged saw-tooth curve.

Xuzen

Speaking of taking profit... a very volatile fund such as below can let one make handsome game... but the risk is just too demanding

But if you like to trade / gamble... try AmPrecious, in one mth gain 13.5%, but its volatility is like 33%. The past three year track record shows 67% of the time it swings between -57% to +9%. If you time it right, when it is at its base of -57%, and it swings to +9%, you would have made a handsome gain of 66% ROI.

Xuzen

Let's go back to basics of investing, FV = PV x (1+ ROI)^(t)

ROI = rate of return
t = time

Chasing return by trading is inferior strategy compared to being invested all the time. Even a lower ROI of say 6% consistent return over time will beat a one off 200% ROI.

Look at the equation again... ROI is linearly related to the gains, but if you have a consistent moderate return but your time invested is long, the gain is exponential! That is why looking at the risk / volatility is very important also. It is not just an academic exercise.

Better still if you can calculate a portfolio that just sits optimally at an inflection point where the risk adjusted return ratio is most optimum = Awesome. Say for example you all may have known perhaps a certain powerful self programed macro algorithm available to some awesome dude who calls it..
..
..
..

Xuzen

LOL noted.

But I am sharing this just as how I share to my client; trading will increase your ROI and may boost your ego. However, if you look it from mathematical point of view, no matter how strong your ROI is, it still lose out to time,t since time is an exponential function, whereas ROI is just a linear function. I hope reader here can see the awesomeness of time!

Hence, it is logical if one is to minimize risk by creating a minimally risky portfolio I,e., and stay the course, time will exponentially increase your Future Value. You don't have to scratch your head about thinking about buying or selling. This is a mathematical truth and is not based on sentiments nor emotion.

Xuzen

Here is a little truth...

Insurance company do not emphasize training on UT. If they do, it is extremely rudimentary. Their training are geared towards sales, sales & more sales.

The very important thing why insurance raison d'etre.. e.g., for income replacement and protection are all not emphasized in lieu of how much the sum assured is, how much commission to get, how to get client to buy big premium are all but drilled into new recruits mind. They are brain-washed into sales sales and sales... this is the sad affair of the insurance industry.

On a side note: Download a fund fact sheet from a pure UT company and you have better the info required to make an informed choice (very importantly the Volatility Factor is on the FFS). Contrast this with a Insurance Investment Linked fund's fact sheet... nuff' said.

Xuzen

This post has been edited by xuzen: Oct 18 2015, 09:37 PM

I have said this before and I will repeat it here again for benefit of newcomers:

Our KLCI is very unique. Foreign institutional buyers will "park" their funds here during times of uncertainties. When there are bull run opportunity else where for example the previous run was due to the "speculative" fed interest rate hike, the ran away to create alpha (excess market return) for their funds.

Now that the "news" is nothing but a dud, they come back here to park their money again to wait for another opportunity. They know that our KLCI will not drop a lot due to KLCI having big cushion i.e., Khazanah, PNB, LTH, LATM, KWSP etc...

KLCI it is a favourite R&R place for these foreign fund to recuperate and rest.

Xuzen

Yang Berhormat Tuan Wong Wongmunkeong, Yang Di-Pertua tidak faham. Ini soalankah ataupun kenyataan?

Yang Di-Pertua Xuzen

Until another story somewhere erupts again....

Xuzen

Strong double digit return for the past three years consecutively.... tight arse errr... I mean tight movement within its mean value (i.e., relatively low volatility).

Apa lagi lu mau?

Xuzen

Prof Emeritus Markowitz will scold you kaw-kaw for saying this!

Xuzen

I think you misunderstood my statement. Let me correct it.... "tight movement around its mean growth rate". Makes more sense now?

Good! Now go read up on FAMA-FRENCH multi risky asset module risk parity pricing model. Good bedtime reading.

Chicks dig numbers guys these days

Tak caya? Just look at Jho Low score on Paris Hilton.

Xuzen

This post has been edited by xuzen: Oct 21 2015, 10:22 PM