Putting so much faith into one single fund manager......

As one sage of days of old said, "The world is impermanence, all that exist are subject to change". If you do not monitor or in UTF's parlance "rebalancing" is also an unwise decision.

Too regular rebalancing is also unwise.

Choose the middle path, once a year is good for those who are passive, twice a year for those more active.

Xuzen

This post has been edited by xuzen: Nov 17 2016, 11:10 AM

For wrap account, you need to open through a Licensed Financial Planner. You cannot open on your own. The Planner that I engaged is a ex- classmate of mine and he is giving me special discount of zero sales charge but a 1% annual wrap fee on the total NAV. According to him, 1% wrap fee is the lowest the system allows it to go. In exchange for the discounted price, I told him I will not bother him, I will do my own research and make my own decisions.

Xuzen.

Casual observation between this Trump fiasco versus the early 2016 China circuit breaker fiasco:

I) China CCB fiasco: All equities are down. All region. Took half a year to come back up. Bond UTF were safe. No equities were safe.

II) Trump fiasco: All equities except US are down. Bond UTF are also down. Volatility is expected until Trump makes his policies clear and concrete. The period of uncertainties is fuelling the volatility and speculative nature of the global market place.

I suggest do nothing now. Don't rebalance or change anything drastic until a clearer picture emerges. If you do RSP / DCA / VCA / DDI / SI whatever you call it, let it just run. Market will eventually rebound. It is matter of when. Like the above scenario (I), it took half a year.... and when it came back, it really came back with a vengeance.

I also need to emphasize, always invest with money that you will not use in the short term. If you need money in the near future, don't invest that portion of money... let it sit in Money Market or FD.

Xuzen

This post has been edited by xuzen: Nov 18 2016, 12:44 PM

My move for next week:

I) TA Global moved up 2%; will skim the profit therein and move it to Manulife India. India is down by 5%.

II) Continue DCA into RHB AIF & AMReits.

Xuzen

My thoughts about using VCA.

One of the criticism about using VCA is when the market is dropping. If you follow VCA style of investing, you can very well over used your reserve bullets if you are not careful.

To overcome this I propose a hybrid method. Here it is:

1) Let's say your UTF A NAV is at MYR 1.00 per unit now. Your initial capital outlay is MYR 1,000.00 and that get you 1,000 units of UTF A. Your plan is to VCA RM 500.00 per month. For the sake of illustration, let's assume the UTF do not distribute, do not perform units split nor give bonus units etc. It is a straight-forward UTF.

Scenario 1:

During the uptrend, let's say after one month, the NAV of UTF A has moved up by ten percent to MYR 1.10 per unit. Using VCA strategy, you would want to top up to RM 1,500.00. Hence you take current units multiply with current NAV = 1.10 x 1,000 = MYR 1,100.00. MYR 1,500.00 (target allocation) less current holding = MYR 1,500 less MYR 1,100 = top up MYR 400.00 instead of MYR 500.00. This is the difference between doing VCA versus DCA. In DCA method you will top up MYR 500.00 irrespective of how the much the NAV is.

During the next month, the you repeat the same and depending on how much the NAV move you top up to make it exactly RM 2,000.00.

Scenario 2:

During downtrend. Lets say now the NAV is MYR 1.15 per unit. And you have a current RM 2,000.00 holding in UTF A. Total units held equal 2,000.00 divided by 1.15 equal to 1,739.13 units. In next month, let's say the NAV dropped to MYR 1.00 per unit. Your holding then becomes 1,739.13 multiply 1.00 equal MYR 1,739.13.

If one follows the VCA method, then the next holding should be at MYR 2,500.00 and if that is the case, then the UTF A participant should top up MYR 2,500.00 less MYR 1,739.13 equal MYR 768.07. If using DCA method, one top up a constant of MYR 500.00

You will notice that during the downtrend, the top up following the VCA method can be scary especially when the market goes down and down.

Therefore my hybrid method is to use VCA method when uptrend to prevent overly aggressive top up and to use DCA during downtrend to prevent overly aggressive top up as well.

This hybrid method, I call Xuzen's Hybrid Cost Averaging [XuHyCA™ - pronounced Su-Hai-Kah] protects both the upside and downside and to prevent overly aggressive top up.

This way your NAV will follow a smooth upward climb.

Xuzen

Let me assist to rephrase:

In Malaysia lack of UTF(s) = no, not really. In FSM universe, there are about 300 UTF(s) listed for transaction.

In Malaysia, what is lacking is variety. Almost 50% are Malaysia centric, another 25% is Asia-Pac centric, the remaining lain-lain.

In Malaysia, tak ada Gold ETFs, Oil ETFs, Latin-America, Russia centric, Germany (despite being a large develop economy) tak ada UTF that is expose to it.

Xuzen

You got tell them that their India fund very popular amonngs the FSM DIY community boh?

TA GTF uses MCSI Information Technology Index as its benchmark. As of Oct 2016 data, the PE is trading at 22.0. The fwd PER is 16.8.

Here is a CFA question for you. Is it cheap or is it expensive. Why?

Xuzen

p/s Contrast this with US S&P Index (the benchmark for Manulife US Equity): Current PE is 25, Fwd PE is 17.85.

Your answer is incorrect. Do you want to try again?

Perhaps others who are studying for the CFA exam would like to try?

Xuzen

Selena Yong Fund Manager of AMReits in the news.



This post has been edited by xuzen: Nov 20 2016, 03:43 PM


Attached thumbnail(s)

MPT = Manyak Pandai Tipu LOL

The Edge this week. In that article, it also mentioned that Phillip Capital Private Limited has launched the first Asia Pacific exclude Japan REITs Exchange Traded Fund (REIT-ETF) to be listed in Singapore Stock Exchange. This ETF will consist of a basket of 30 REITs counter from the Asia Pacific ex-Japan region that gives consistent dividend.

Xuzen

This post has been edited by xuzen: Nov 20 2016, 03:52 PM

I'm ol'skool. I like to drink my Blue mountain™ coffee freshly pressed from the beans and holding a real piece of smooth coffee table type news-mag.

and

It's only RM 5.00, you cheapskate!

Xuzen

This post has been edited by xuzen: Nov 20 2016, 04:00 PM

Sungei.Paser manyak pandai! Ramjade, take heed.

Xuzen

Wow! I wrote this in Nov 2015, exactly one year ago. Hence let me revisit this topic and see how did my predication went.

The fund perform quite badly YTD. It went down in the first quarter of 2016, only started to perform in quarter two and went all the way up until Nov 2016 which she dropped again due to the Donald Trump winning the US election.

My prediction back then was it will be better than 11.53% . However, currently the one year historical performance is around 4% only. I guess the 33% part came through rather than the 67% part.

My prediction was incorrect.

So let's see again next year will the prediction hold true. As the three year mean is around 12% p.a., and the standard-deviation is 8.6, currently its performance is only around 4% which is hovering around near the one standard deviation mark.

If using my statistical modelling, the UTF NAV should definitely perform converging to its mean value, that is around 12%.

Let's see whether next year is true or not.

Xuzen

This post has been edited by xuzen: Nov 20 2016, 10:54 PM

My not so educated opinion:

The Edge target those big biz, corporate movers and shakers. Also good for those who invest into shares. A lot of corporate news that are helpful.

Focus Malaysia is more towards SME type biz. Lots of entrepreneur type articles ..... good for those who have the entrepreneur spirit.

The above is my very over-simplified observation.

Xuzen

You want my view? Do you really want my view? Do ya? Do you really really really want my view?

My view is that Negan is such a badazz!

Xuzen

p/s on a more serious note; the consensus out there is that MYR will continue to slide because there is no factor to stop it. The consensus is that USD will continue to move upwards.

What to do?

Buy USD denominated fixed income instrument. How does a USD denominated 24 mths maturity 10% fixed return endowment type product sound? To make it simple; put in USD 20K today, in 24mths later get back USD 22K. Simple. No need to think about volatility lar, Sharpe ratio lar, Sortino ratio lar..... etc.



This post has been edited by xuzen: Nov 21 2016, 08:08 PM

In these two days, my port went up four digits.

India and Tech helped.

Xuzen

p/s Algozen™ is beginning to RHB ATRF (Asia-pac High yield corporate bond). I think I may adopt conscious decoupling from RHB AIF and split it up to RHB ATRF and REITs since if you look into RHB AIF asset holding , she is REITs & Corp bonds exposed mainly.

This post has been edited by xuzen: Nov 24 2016, 01:59 PM

RHB ATRF was not my lil'darling previously because the risk to reward was poorer compared to RHB AIF. However, post Trump effect, some of the numbers are changing.

RHB ATRF risk to reward number is creeping up to RHB AIF level, almost neck to neck. In the final analysis, however the winning point goes to RHB ATRF because it has a lower corr-coeff compared to RHB AIF.

Xuzen

p/s Disclaimer: Xuzen is splitting hair. If you are not on wrap account and your switching incur fees, then maintain with RHB AIF if you are already having participation with RHB AIF.