FSM Sgp also offers funds that payout monthly dividends. Then we get our money faster to take advantage of opportunities in the mkt, or for our monthly usage for those who are retired.

It's just like a monthly salary dropping our account.

These are high-yield bond funds. They are available in the USD too. Good proxy for keeping your USDs, than letting your USDs sit in the bank earning zero interest.

Edited by adding the third para to provide more infos for investors.

This post has been edited by Hansel: Oct 31 2015, 01:02 PM

The high-yield bonds funds are yielding 7+% at current nav.

The one that you are holding, the Alianz US HY. The price as of Oct 30, 2015 is USD 8.49 per unit and the annual DPU = USD 0.06 per month per unit x 12 = USD0.72 per year.

USD 0.72 / USD 8.49 = 8.48% yield.

HOWEVER : High Yield Bonds are also known as Junk Bonds - that's what many people say. Risk of defaults ?

But the interesting part is I have been carrying a Euro HY Bond Fund for eight years, and right thru the European Crisis too, and till today, the HY Bond Fund is still paying-out 4.17% of yield.

The DPU does go up and down, so does the NAV, but the yield has always been above 4%.

I heard these HY Bond Funds will have their NAVs dropping badly when the US rate hike does happen, but if the FOMC is careful enough not to raise too much, and is data-dependant to decide on when to hike, then the impact to the US-centric HY Bond Funds should be minimal.

I am just waiting to top-up on these US-centric HY Bond Funds, with the view that the US mkt should be able to do well, with the close 'nurturing' of the US Gov't. Are you waiting to top-up too ? What that truely caught my eyes about these HY Bond Funds are their monthly payout feature, with which I can get my hands on my money faster for reinvestment.

['QUOTE(prince_mk @ Nov 3 2015, 10:52 AM)
I put in United Asian HY Bond Dist SGD. My favourite fund. '
quote=dasecret,Nov 3 2015, 04:04 PM]
Thanks! The fund looks really good

[/quote]

Hi prince and dasecret, this fund got me interested and I looked up in it. Based on the fund properties, looks like the fund was launched way back in May 13, 2013, and it only started paying monthly dividend on April 29. 2014.

https://secure.fundsupermart.com/main/fundi...olnumber=UOB046

Any idea why did it not start to pay dividend upon launching ?

Analysing the dividend payout each month from April 2015 till October 2015, the lowest payout was in July 14, amounting to SGD 0.00662159 per unit.

SGD 0.00662159 x 12 = SGD 0.079458, and SGD 0.079458 / SGD 1.175 (price for Oct 30, 2015) gives a yield of 6.76%, which is a fair yield,... yes !

The dividend does not seem to be consistent every month, unlike the Allianz HY USD Funds which give out quite a consistent dividend. What are the other factors that you guys look at which qualify this fund as being good ?

[quote=dasecret,Nov 3 2015, 05:17 PM]
Hi prince and dasecret, this fund got me interested and I looked up in it. Based on the fund properties, looks like the fund was launched way back in May 13, 2013, and it only started paying monthly dividend on April 29. 2014.

https://secure.fundsupermart.com/main/fundi...olnumber=UOB046

Any idea why did it not start to pay dividend upon launching ?

Analysing the dividend payout each month from April 2015 till October 2015, the lowest payout was in July 14, amounting to SGD 0.00662159 per unit.

SGD 0.00662159 x 12 = SGD 0.079458, and SGD 0.079458 / SGD 1.175 (price for Oct 30, 2015) gives a yield of 6.76%, which is a fair yield,... yes !

The dividend does not seem to be consistent every month, unlike the Allianz HY USD Funds which give out quite a consistent dividend. What are the other factors that you guys look at which qualify this fund as being good ?

[/quote]

I look at fund returns in the form of IRR, and ROI to a lesser extent. Dividend yield is not a consideration for me since I prefer to reinvest and grow my investment

[/quote]

Thank you, dasecret,... if you're of that view, then wouldn't a fund that does not pay out dividends at all, not to mention monthly dividends some more, provide you better IRR (hence, leading to ROI too) than this fund ? A fund that keeps all its earnings for would be able to increase its NAV better and faster, right ?

Do you look at its holdings, and the safety of the fund's holdings, since we are dealing with High Yield bonds being the holdings of the funds here ?

I observed that the IRR, or the nav movement started to trend down when the FOMC announced the tapering event last year, followed by the 'threat' of the rate hike this year. Previously, the nav movement was either increasing and remained stable.

I believed that the nav will recover after the FOMC has actually performed the rate hike. But if course, this is left to be seen,... I am waiting for the rate hike.

Why do they have 2 types of fund performance readings - the Offer to Bid and the Bid-to Bid Returns ?

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

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 ?

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.

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

Thank you, Pinky,... appreciated it.

Of the five funds that you have listed, please be careful of the Allianz Income and Growth Fund, the Platform Fee in FSM Sgp follows the structure for Equities Fund. This Platform Fee thing started back ard 2010/2011, and for those who purchased Fixed-Income Funds, the Platform Fee is 0.05% of your holdings amount per quarter, deducted around the middle of the months of Mar, Jun, Sep and Dec.

This equates to 0.20% of your holdings amt per year.

I don't recall the Equities Fund Platform Fee, but it is higher than the one for Fixed Income Funds !

Bonds are tradeable, when the price of a bond goes up or down, the annualised coupon payout of the bond when divided by the current mkt price of the same bond goes up or down too. This in turn, gives rise to the yield of the bond.

This is called the : yield-to-maturity = YTM.

The YTM amortised cost of the same bond is related to this movement as the bond undergoes buying and selling in the marketplace where it is traded upon as it apprached its maturity date day-by-day, if it is not a perpetual bond.

But be careful of a bond that is redeemable, where it can be called back by the issuer at the pre-agreed terms of the issuer. We must understand the terms.

I'll put it in more layman's terms. In Sgp,... we call the amortised cost as being the closest possible to the mark-tomkt value. Today, if I am to take a loan of any form in Sgp, my collaterals will always be evaluated frequently against the mark-to-mkt value. The mark-to mkt value dos change, though not it is not that volatile. If it is too volatile, then nobody would want to borrow in Sgp anymore.

BOnd FUnds - this is what I am into,... HY Funds. No,... Bond Funds do sell and buy and with this action - they are managing our portfolios actively. this activity of buying and selling is more apparent when the mkt is volatile and the rate of default goes up. This is to keep us safe, and the reason why we are paying the manager fees.

I would want them to buy and sell more frequently, since I have alaredy paid their charges. They should not just sit on their laurels and try to save on their side of the fees for buying and selling and managing their portfolios effectively - I have heard of certain bond funds trying to save on their fees, even when these fees are negligent.

Amortisation is a term closely related to an accounting event 'predicted' for the future, much like Depreciation. The contribution of the Amortisation effect is important for the purpose of calculation,... in our current debate, the value for investors. Hence, the Amortised Cost must be watched closely, and not to be taken lightly as if there is no movement at all.

Accounting can be captured fairly quickly and easily by 21st Century individuals. Sometimes, we need to dive into it when we wish to have safer investments.

Okay,... gents, I need to rush to the airport,... the captain will issue just two calls after everybody has boarded EVEN though they declared they will wait for ALL 'front' passengers who have checked-in to board before they close the final doors for takeoff.

Pinky,.. appreciated your comments, Sir,... thank you.

Hi Terence,.. I hold the Allianz US High Yield Fund - the fund has dropped in its nav but why would the HNWIs suffer big losses ? The monthly dividend was reduced once last September if I recalled correctly, till the recent review last September, the divvy has not been reduced.

The NAV dropped because of some redemptions by investors because of the fear of oil price dropping, which may have caused some energy issuers to default of their coupon payments to the fund, but if we look closely at the top ten holdings of the fund, I am not that nervous. The bond issuers are not all energy companies. There is quite a large proportion of the companies being in the financial sector.

Nice trick,..... I do this too,... but I don't transfer everything out, because need to let my RM in FSM Sgo make some dough too. After all, as an FSM+ investor, need to look after my lady inside.

Edited by adding : hey,.. do they charge you any charges for transferring out ? I know they charge quite a lot for transferring out shares from CDP to any bank.

This post has been edited by Hansel: Nov 11 2015, 07:30 PM

Good morning,.. well, theoretically, you can transfer all the funds out to a bank. But I'm not sure whether in a normal environment, are there transfer fees ? Please be aware of this. Hoped Terence can enlighten us here.

Secondly,... are there trustee fees charged by the bank for keeping the funds safely for you ?