1)  UTF is not stock. It's price does not reflect the true price, it is a just a collective price of its marked-to-market price of all its ssets under its trust account. Confused? Let's take Kenanga Growth Fund, a perrenial favourite of FSM kakis. It's top holding consist of TNB and MBB. Now, as of yesterday, its NAV is RM1.105. So, what is actual price? TNB is not RM 1.105 neither is MBB. So how come KGF is RM 1.105? This RM 1.0105 is not a true value for KGF but rather , what I would call a transactional price. A price for the purpose of transaction.

2) So the question is how do you find out the true value of a UTF? This then, in my opinion, the true value of the UTF is the capability of the fund manager. There are of course financial metrics to evaluate the capabilities of the fund manager such as Sharpe, Sortino, Modigiliani ratio etc which is beyond the scope of my article here.

3) So, why not buy when the price of UTF is low and sell when higher. This is because, looking at the NAV alone or the transactional price alone is misleading as the NAV can be manipulated by the fund manager by various methods such as Unit Split, declaring distribution etc...

4) when you put money into UTF, the fund manager would have taken the liberty to time the market for you in a sense, he / she would deemed when is the suitable time to buy a certain counter or not. Let's consider Affin Hwang Select Dividend fund, in its latest Fund Fact Sheet, she is holding 22% cash. Why is the fund manager holding cash when this is an equity fund? This is because the fund manager has decided to time the market of when to enter the remaining cash. Hence, as a unit trust participants, you are doing double job. Timing the market is already done by the fund manager for you for a fee. Hence, let the fund manager do his / her job. Our job is to evaluate the capability of the fund manager.

5) So, if that is the case, what good is DCA? DCA reduces the concentration risk. It spread out your risk of entering the market. Imagine what would happen to your portfolio if you enter all at once in Feb 2018 versus if you enter 10% every month bit-by-bit until now. Which method would suffer greater lost? Will DCA increase your return? No it will not. Also, DCA is a method for retail participants to slowly build up their equity participation because not everyone has a lump sum to begin with. Many are just your regular working Joe and Jane who save a little bit here and there every month.

6) My final say is, timing the market is an investment strategy that works poorly with unit trust. It is better to DCA it, and let the fund manager do his / her job. Before anyone misquote me or misunderstand me, I repeat, I am not saying timing the market is bad. All I am saying is using Unit Trust as a product to time the market is bad idea.