My Equity funds holding as at Nov 2015 :

1. Nikko AM Japan Div
2. First State Dividend Advantage
3. Pinebridge India Equity
4. Unitrd Globalhealthcare fund

prince, dasecret and yck,... Thank you for your inputs.

In essence, what I gathered from the inputs is that dividend payouts are actually 'left-pocket-to-right-pocket' moves, and these moves are damaging to the nav. So, it is better to buy funds which do not give out dividends.

If we intend to diversify our investments by including funds which give out dividends for our cashflow, what can we do ? Or are we saying here that this is actually a bad idea, and that there is no such thing as a fund (or a unit trust) that gives out dividends, and still to continue to perform well in the long run ?

Edited by adding to the third para to make the statement clearer and more precise.

This post has been edited by Hansel: Nov 4 2015, 12:35 PM

Same thing, focus on bid-to-bid returns. But hor, past returns are not indicative of future performance
Shortlist funds that you are happy with; then within those funds, if you prefer those that payout dividends for cash flow purposes, choose those lor. Just bear in mind if you don't reinvest the dividends, your capital would not really grow, or might shrink if the dividend payout is greater than IRR

Or, if you like a fund that does not do distribution, you can DIY dividends by selling some units on a periodic basis to simulate the dividend payout

What others equity funds that u think is performing besides First State Dividend Advantage (Asia Pac Ex Jap)?

This post has been edited by prince_mk: Nov 5 2015, 07:26 AM

What others equity funds that u think is performing besides First State Dividend Advantage (Asia Pac Ex Jap)?

I wanted to ask you this question but you beat me to it

I also have First State Asian Growth fund, but both funds are from the same sector, so up and down together one
The US and europe funds all sky high dy so I don't dare to masuk la...limited bullets

What others equity funds that u think is performing besides First State Dividend Advantage (Asia Pac Ex Jap)?

I would suggest to look up at https://secure.fundsupermart.com/main/fundi...olnumber=AMD015
for global equity sector. I used to hold my long favorite Aberdeen Global Opportunities but recent months I switch all holdings from Aberdeen to Amundi Fund.

The main reason for the switch between this two fund is due to the strategy of the fund. The First Eagle Amundi International fund adopts a value investing approach and focuses on financially strong or monopolistic companies. The fund does not have any restrictions in terms of market capitalization or geographical allocations, current allocations are due to the stock and value selection process the manager adopts. The fund also holds a small portion in gold to act as an event hedge in case stock markets were to face an unexpected correction, in addition they can also hold significant amounts in cash or treasuries if their stock selections are not at attractive valuations.

As I have observed from the fund’s past performance against the Aberdeen Global Opportunities, the strategy has historically allowed them to experience lower levels of volatility without sacrificing their ability to generate returns for investors. However do note that in extremely bullish conditions, the First Eagle Amundi International fund can potentially underperform due to its more defensive investment approach. So pick your own choice.

Please read Post #1 on FSM Malaysia thread to understand more on distributions/dividends in the context of unit trusts. It has got no impact at all to your net worth, so it's neither good nor bad.

^
He said it well.

E.g. your target have RM2K a month from your investments. Then every month just sell RM2K worth of units to "pay yourself".

But make sure your funds are growing at rate greater than that, else you will be withdrawing from your capital, which will shrink over time from your withdrawal action.

This post has been edited by Pink Spider: Nov 4 2015, 06:57 PM

The following reply would be most relevant to my current research :-

Then what's the point of dividend distribution since units and NAV price has negative correlation?

Distribution is very relevant especially to retiree investors who want a source of income. For this type of investors, basically what they can do is to invest in a fund that has a distribution policy, and elect to receive distributions in the form of CASH. To an investor who elect to receive distributions in cash, distributions are a form of income, a cash inflow; gains in NAV price are capital growth.

E.g. upon retirement you have RM1mil which you invest in a fund. The fund that you invested in made a return of 10% and declares 8% as dividend for the financial year, that's RM80,000 of cash inflow for you! Of course, when a distribution is declared and paid, the NAV price will drop proportionately. The balance of 2% that are not declared as distribution will be reinvested for future growth.

I would like to mention a HY Fund which I have invested in since 2007. It pays out a monthly dividend.

I bought the fund at an average price of EUR11.04 back in 2007/2008. The price as of today is at : EUR11.24.

Throughout the years, I have been receiving dividends every month without fail, though the amount given out goes up and down. I received the dividend amount for October 2015 two weeks back, which came to EUR 0.0390 for the month of Oct, 2015.

Annualised for EUR 0.0390 came to EUR 0.468. Hence, yield = 4.23%.

I have cap gain as well as monthly dividend for this HY fund. This fund has done well over the European Crisis too, not to mention other crises that came about in the past 7 - 8 years.

Would you agree that this should be the type of fund that we should hunt for ? Alternatively,...should we rather look at it as : if this fund does not pay out dividends, the nav price could have reached EUR 13.00 today ?

No be frank, I stopped reading at paragraph 3 of your post...then I re-read the whole thing when I see the last line.

Yes, that HY fund u mentioned would be 100%, definitely and surely valued at a way higher NAV price had it not distributed dividends. Basically the NAV would be around

Current NAV price add back all the dividends distributed = NAV price had it not distributed any dividends

A mutual fund does not behave in a same way as a stock. In fact, it does not even have a "behaviour", so to speak of.

The NAV price is a very scientific, mechanical calculation = assets less liabilities divided by the number of units

Whereas a stock can trade higher and lower than its underlying valuation from the bidding and offering process in the market, i.e. there are many variables that can affect the price of a stock.

U really need to read up more and understand better WHAT IS A UNIT TRUST/MUTUAL FUND'S NAV PRICE.

This post has been edited by Pink Spider: Nov 4 2015, 09:55 PM

I get it - let me add this,... a fund can be made up of equities (an equity fund), or bonds (a bond fund) or a mixture of equities and bonds (a balanced fund).

Let's take an equity fund as eg. The nav would be the total book value of all the equity counters in the fund divided by the number of counters in the fund.

Thank you,.. rest assured that I will do my homework before I wasted more of your time,.. I'll be honest that yes, I intend to pick-up more via discussions.

Eh, wrong!

NAV price of an equity fund would be sum of MARKET VALUE of all its equity counters, its cash, less its liabilities divided by the no. of units the equity fund has in circulation.

A stock is an ownership in a company.

E.g. ABC Berhad net assets (total assets less total liabilities) are worth RM10M. It has 10M shares in circulation, hence NAV of RM1 per share. Yet it is perfectly normal for it to be traded on an Exchange for RM5, RM10 or even RM20. Just take a look at DiGi.com Berhad for example.

But a mutual fund is different. A mutual fund can only be bought and sold at its NAV price, nothing more, nothing less.

This post has been edited by Pink Spider: Nov 4 2015, 10:18 PM

From FSM thread Post #1

Go study Post #1 THOROUGHLY and u should have a basic picture on what is a unit trust.

Pinky, I appreciated your reply... so, an equity fund is not equal to a mutual fund ? What are the underlyings of a mutual fund ?

Edited by adding : did not see your immediate previous post when I replied to this. Okay,..I'll take it from here. You don't have to answer the above. Anyway, I am into Bond Funds,.. so I'll focus into bond funds, specifically High Yield Bond Funds.

The 'images are very clear now'.

This post has been edited by Hansel: Nov 4 2015, 10:35 PM

mutual fund = unit trust fund
different name for the same thing

While a unit trust fund can be an equity fund, bond fund, balance fund, or a money market fund

Same.

Bonds are either valued at market value or yield-to-maturity amortised cost (well, this is an accounting/finance term, go learn more if u keen ).

A mutual fund's NAV is the aggregate of its assets less its liabilities.

Hence, NAV price is NAV divided by no. of units.

Glad to have helped

This post has been edited by Pink Spider: Nov 4 2015, 10:43 PM

Thank you, Pinky,... appreciated it.

Btw our Ponzi2 is available in FSM SG anyone buy this fund hehehehehe

I was advised by CIS that choose one of them coz they are having same mandate.

What i understand frm FSM Msia thread, sky high price means u get lesser units. when choosing a unit, u should see its performance instead of its price correct me if wrong.