Good day to you good sister,
I will attempt to answer you question objectively. I shall use two examples. And for argument's sake I shall take TA GTF and RHB AIF. From friend
Ramjade's words, TA GTF is the daughter of Henderson Global Tech fund denominated in SGD; whereas RHB AIF is the daughter fund of Schroder Asia Income fund. Both the mother funds are denominated in SGD.
A)
Lets take case for RHB AIF. » Click to show Spoiler - click again to hide... «
Three years ago on 31/3/2014: SGD 1,000.00 = MYR 2,595.23
Today rate as of 31/3/2017: SGD 1,000.00 = MYR 3,167.04
RHB AIF 3 years annulized return is 12.66% p.a.
Schroder AIF 3 years annulized return is 5.00% p.a.
Lets say you participated SGD 1,000.00 into SAIF 3 years ago, today value shall be SGD 1,157.63, convert it to MYR as of today rate = SGD 1,157.63 x 3.16704 = MYR 3,666.24
Lets say you participate MYR 2,595.23 (eqv to SGD 1,000) into RHB AIF 3 years ago, today value shall be MYR 3,710.95
RHB AIF wins mother fund.
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B)
Lets take the case for TA GTF» Click to show Spoiler - click again to hide... «
Three years ago on 31/3/2014: SGD 1,000.00 = MYR 2,595.23
Today rate as of 31/3/2017: SGD 1,000.00 = MYR 3,167.04
TA GTF 3 years annualized return is 18.78% p.a.
Henderson GTF 3 years annualized return is 13.28% p.a.
Lets say you participated SGD 1,000.00 into HGTF 3 years ago, today value shall be SGD 1,453.65, convert it to MYR as of today rate = SGD 1,453.65 x 3.16704 = MYR 4,603.77
Lets say you participate MYR 2,595.23 (eqv to SGD 1,000.00) into TA GTF 3 years ago, today value shall be MYR 4,349.16
TA GTF loses to mother fund.
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What is the takeaway message here?
Forex is too unpredictable. Some daughter fund wins mother fund; other loses to mother fund.
The final say is that there is no room for generalization.
My personal take is, investing is already a risky business, hence do not take in more unnecessary risky. For example, if you are not a resident of S'pore, it makes no sense to buy an asset that is denominated in SGD because you are introducing another element of risk aka unpredictability into the equation.
Xuzen
p/s Data are obtained form Xe.com website for forex data, FSM MY for both RHB AIF & TA GTF, FSM SG for SAIF and HGTF.
1) RHB AIF 3 years annulized return is 12.66% p.a.
Schroder AIF 3 years annulized return is 5.00% p.a.
RHB's annualized return is two times more than Schroder's, then only will the RM-based fund wins.
2) TA GTF 3 years annualized return is 18.78% p.a.
Henderson GTF 3 years annualized return is 13.28% p.a.
TA's annualized return is 5.5% more than Henderson's, still overall, TA (the RM-based fund) loses out to Henderson.
One conclusion that can be extracted from here is with the help of currency appreciation, the mother fund does not simply need to perform better compared to the child fund in order to beat the feeder fund,.. ie currency strength helps !
Apr 1 2017, 01:50 PM
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