from my experience with FSM,...it depends on the fund houses.....sometimes it takes abt 7 to 20 days to get the extra units added into my a/c.
in the meantime, my a/c just show "loses" (with a "D" logo)

the extra units is just not added in....
the NAV after the Ex date still remain
which mean your lower NAV (after Ex Date) x your current unit = just not the correct / actual value of your fund...
you need to wait for them to update the extra units into your current unit to get the update number of units value

  more funds can make more money

2017 CNY seems good,
FSM keep going up.
5k in 2 weeks

If one enters the fund one year ago, he would have gotten 34% return.

I can't wait to see your ROI this coming December.

irr=roi/year.

3.75=14.45/3.85years wrong????

ohhh you invested 3.8yers alredy. is same rate 3+%like saving in bank fdeposit.
long term also same rate means your portf is cancelling each other, profit cancelled by negative lost?
you have too manu funds, not using shifus advice method allocation?

No idea why the current new guys don't seem to want to learn and keep being so stubborn when you give them all the info

Read the first page people!

I'm not a sifu la, just a fellow investor.

Those examples were fixed rates though. The thing with 3/5-year annualized returns is that it shows the "average" annual return over the past 3/5 years, so if there's an excellent year in there, it'll pull up the values. You could lump sum into a bad year and get very bad returns in the first year and have to wait 3 years to see your investment's annualized return match the published numbers.

Here's a more detailed look at IRR, how it is calculated and the implications of it:


Edit: Note that IRR is often used to evaluate different investments but it has some drawbacks.

I started to be to aware of proper financial planning method in my mid thirties. Now after ten years I can see small results. I regret that I did not start during my early twenties, immediately when I started working and receiving my first pay -  cheque.

Imagine how much better I could have achieve if I had started 15 years earlier than I did.

This brings me back to my earlier mathematical formula stating that ROI matters less than the time you invest. ROI is linearly related to wealth, whereas time invested is exponentially related.

For those who are watching IRR and ROi and whats not, do not be overly obessessed with them for in twenty years time, even a modest return but compounded over a long time will yield good result.

Case in point, I started contributing into AHAM PRS when it started way back in Aug 2012. The first NAV was MYR 0.50 per unit (initial offering). I have since DCA MYR 250.00 per month without fail into PRS by using auto-debit function. Today, the NAV is hovering around MYR 0.59 per unit and that is despite the distribution already occurred?

Xuzen

Firstly, they are not the exact same investment purely because the approach is different.
Secondly, define "beat"? If you're talking final ROI, yes, lump sum is better. If you're talking which one is the better investment, then periodic is better. Which do you care about more?

Note that ROI, IRR, CAGR values are all general metrics that tell you the return of your investment in different ways. (https://forum.lowyat.net/index.php?showtopic=3730638&view=findpost&p=76895955)

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By definition the IRR is the rate at which the sum of the Present Value of your investment's inputs and outputs equal to zero, i.e. Net Present Value = 0. So, if you adjust everything to right now (Present Value), how much do I have to adjust so that my top-ups PLUS my final return so that adding them up will become zero? That "how much" is the IRR.

What is the Present Value? To understand this concept, you first have to realize that RM 1000 in your hands right now is more valuable than RM 1000 4 years later. This is called the Time Value of Money. This is the reason why interest rates exist. If I have RM 1000 now, I can put it to use now rather than later (i.e. it has the potential to generate interest). When calculating current investment value and past top-ups, "present" is shifted to the beginning of the investment (initial investment).

Why total to zero? Because you want to find the rate where the breakeven point happens. Negative means you need to lose money to reach breakeven, and positive means you'll gain money to reach breakeven.

So how do you find the IRR? You can use approximations (or graphical methods) to find an acceptable number. A simple way to think about this is to first try the number 10%, and then trying 9% and 11% to see which one gets you closer to zero, and just keep trying till you get a fairly accurate zero. In Excel, the calculation stops at 0.000001 percent accuracy.

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Back to the example I gave:
The IRR of the periodic investment is 5.87% and the ROI is 13.14%.
The IRR of the lump sum investment is 5% and the ROI is 21.55%.

Why is the periodic investment IRR higher but ROI lower? Because when trying out different rates to try and get breakeven, we find that IF we adjust all the money we invest AND the final value to the day we first started investing, a RATE of 5.87% per year will give us RM 18102.53.

So at 5.87% a year and you got RM 18102.53 in 4 years, how much would the investment have cost if you do lump sum instead of periodic? Easy: RM 18102.53/(1.0587^4) = RM 14409.98.

Is this a better investment? Sure, because although you spent RM 16000 over the 4 years, you did not have to cough up RM 16000 one shot lump sum right at the beginning! Remember money later on is worth less than it was before. Your RM 16000 over the 4 years at 5% PA (given your investment pattern) is the equivalent of a lump sum RM 14409.98 4 years ago at 5.87% PA. This also means that considering time value of money, the ROI is higher.

From another POV, you can say that IRR is used to tell you what returns different investments generate/generated when compared against a standard. You need to standardize before you can do meaningful comparisons.

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IRR has some drawbacks and is not usually used alone. In this example, the two investments have the same duration of 4 years with the same annual return so you can use IRR to compare the two strategies. Also note that the "I" refers to "Internal", i.e. not taking into account external factors (risk, etc).

Again: ROI, IRR, CAGR tell you different aspects about the return of your investment. As an investor, you have to know what you want and use these numbers to tell you if the investment is suitable for you.