right movement is when there's some promo & the NAV is suitable to buy.

or when there's so much reducing in IRR or any other factors that might contribute to decision on top-up, sell off or re-balancing

Ngiam ngiam ngiam ...

I kinda expected this kind of high level kung fu to come from you !


Attached image(s)

Hahaha. Once in a while you just have to eat the pussy...cat.

I have read the RHB Islamic Bond Fund annual report and found the following facts, hope all sifus can gve your opinion.

1) the fund size is not big, it grow approx. RM10mil per year, from RM23 mil (2013), to RM33mil (2014) and to RM43 mil (2015).
2) the short-term return (1,3, 6 months) performance are disappointing compared to the benchmark of FD Rate.
3) there is one bond default in 2012 and recovered recently in 2013, which contributed to the accessive gain of 20% for the year 2013.
4) Fund is in low liquidity, 98.65% of the funds holding bonds and only 1.35% cash (liquidity), wonder if t can meet any immediate redemption bearing in mind 2.5% of the investors own 86% of the funds. There are only 320 investors in this fund. 50% of the investors own less than 0.7% of the fund size, which is very extreme.

Based on the above,

a) I wonder if it is still advisable to invest in this fund (or any other bond fund) since the interest rate is escalating. The theory depicts that interest rate and bond performance has an invert relationship.
b) how is the default risk for malaysian bonds?

Hope sifu give your inputs.....

FSM offer two strategies for bond investors to consider.
*Maintain a shorter duration approach when choosing bonds
*Increase exposure to high yield corporate credit

http://www.fundsupermart.com.my/main/resea...-Investors-6317

How Risky is Your Bond Fund?
October 30, 2009
As a general rule of thumb higher yields mean higher risk. In this article, we share with investor more information to assess the riskiness of bond funds. .....Author : iFast Research Team
http://www.fundsupermart.com.my/main/resea...-Bond-Fund--412

thanks, even though the article is 6-7 years old.

yes,..but the criteria for determining that risk would still be relevant.

Chances are they might liquidate some investments to meet redemption demands from unitholders?

Btw, your investment must be REAL big to worry about this...

I'm not holding any Malaysian bond fund at the moment.

Liquidation risk is one of the risks to consider.
When the needs arise, the fund manager needs to liquidate or force selling the bonds that making profit at discounted rate, which will affect the performance of the fund

Anyone invest in this fund? What is your take for investing and de invest from this fund?

As a retail investor you have neither control over exposure, duration nor credit rating.

The rule of thumb when choosing a bond funds is : the bigger, the better. Corporate papers generally run at 5mio each. So default and liquidation risk can be minimised by sheer size alone.

If these are your concerns, skip this fund. Move on. There are many other fixed income funds out there.

Thanks for your inputs
In your opinion, what fund size is consider big enough to diversify the risk?

I am talking about bond fund in general...

Let's say a company issued bond at par value of US$1000, with coupon rate of 5%. That means every year, it pays interest of $50/unit.

With Fed rate hike, the market value of the bond may drop. Let's say before that it was traded at $1000. Now the market price has dropped to $980. The issuer will still pay interest at $50, not $49.

And, as maturity date draws close, the market price will move towards its par value, which is $1000.

All these, provided that there is no DEFAULT.

Rate hike does increase the possibility of default. However, from what I know, bond default rate is low, even among junk bonds.

OK, will all those said, you make your own judgment



This post has been edited by river.sand: Dec 27 2015, 02:48 PM

I usually try to find funds that run 250mio and above, but I have purchased Eastspring Bond for a few clients, (about 100+mio) because the client was comfortable with its performance and CIO.

U r financial advisor?

hi guys

for cooling off period, does that mean if i withdraw within that period, no sales charge occurs?

can we utilize this feature to exit the fund if price drop a lot during that period?

Thanks for your explanation.
appatently it make more sense to invest in bigger size bond funds

why forego RHB Islamic BF ? it has been doing extremely well and consistently for past 5 years

I am a con-sultan, but haven't manage to con any sultan yet.

This post has been edited by T231H: Dec 27 2015, 03:39 PM