https://www.bloomberg.com/news/videos/2017-...investing-video

In Malaysia unit trust funds are being sold as if they are the final answer to your retirement plans - at least that is the impression that I am getting from unit trust consultants who are paid handsomely as commissions from the investments made by their clients. But are there other types of investments out there which are more passive, or perhaps even more active than unit trusts?

Sure, passive-wise you can look into index-funds, these funds track a particular index; the index is invested in all the stocks that make up an index - like the S&P 500.

More active-wise, you can look into hedge-funds, but I will not talk about them too much since they are not too relevant for the average-joe reading this topic. They are aggressively managed, promises good returns, but comes with very high fees, which are paid regardless of their performances (but they get paid more as they generate higher returns for the investors). Avoid or not, up to you.

The arguments against actively-managed investment (in this case, the aforementioned unit trust funds):

- high management fees (1 to 2.5% per annum) eating up the profits
- high agent fees also eating up your initial investments (between 5.5% to 6.5% for cash investments and 3% for EPF-withdrawal investments).
- majority of funds end up end up not beating the index in 1, 5, and even 10 years periods, as published in several studies, also quoted in the video (the high fees being quoted as a big part of the problem)

In Malaysia there is a limited number of ETFs or index funds that we can buy; you need to look overseas. You can perhaps start looking into Vanguard and other providers. I believe there are services that allow you to buy them while in Malaysia.

Disclaimer: I'm not selling anything nor am I an investment agent, I have no material interests in any of these companies/organizations.

This post has been edited by wild_card_my: Aug 8 2017, 04:33 AM

I advocate opening a CDS account and learning to trade stocks by yourself. It's easy, and you don't incur any management charges. With the wealth of information available online, it's no longer a steep learning curve.

What is your personal preference for growing wealth when taking into consideration risk and return?

Money game is way forward

All gone quiet already ,

Passive funds are not based on value investing principle, so there is a risk of bubble.

As long as dun tipu your hard savings and cabut

Out of topic question: How much % do the UT consultant make from commission? Say, if I invest 10k, how much do the agent gets?

Hmmm, for newbie who doesn't know anything or have time to monitor the stock,

wouldn't it be wiser to start off with some Monthly Investment Plan?

Straight jump into using Margin facility like Tiger bank on9 to buy stock is akin to hanging oneself with rope.

this is why i dnt go for unit trust consultant...due to their high sales charges/agent fee
i do it on my own through a company and sales charge/agent fee is only 1% max...sometime can go as low as 0.5%

regarding hedge fund which i have no idea how, how's the risk and volatility compared to unit trust?

already wrote there between 5.5% to 6.5% for the amount u invested
and i did it with 1%

You don't have to sign up for a margin account. I started with a cash account and RM1k capital. The important thing is you must be willing to learn. On the way you pick up a lot about economics and financial literacy, both of which help you streamline your expenditure better.

Invest with fundsupermart

UT max can earn how much %

I agree. It is a good place to start. At some point in your life you may even think of doing the work. If it doesnt suit you, leave it. It you find it useful, you can start managing your own funds. Plenty of people do well in this area, but of course, plenty of people lost out too.

Personally, I prefer something that is more liquid. I dislike properties due to its illiquidity, although I am doing mortgage as my business. Directly investing in stocks are a good idea if you can manage it well - you do not have to day trade, you can always buy and hold. The best thing is that there is no capital gains tax in Malaysia (except for a time RPGT which is for properties) so if you buy a growing company which pays no dividends (which are taxed) then you would be good to go.

Disclaimer: I do not represent any CDS company nor am I interested in selling you anything

Perhaps you are right. But plenty of "fund managers" tried to do value investing and still end up short. Or maybe they were successful, but due to their own management fees and agent fees, the investors end up not having enough. This is why Vanguard is the second-biggest asset-manager after BlackRock (which we can talk about in a different day)

1. For cash investment, the sales charge is 5.5-6.5%, but the agent gets 3%, and beyond that goes to the upline and company. So if you are a GAM (or whatever is the highest manager level), you can make more than 3% because you will be overriding your own sales

2. For EPF investments, sales charge is capped to 3%, and the agent will get 2% flat.



Hedge funds would be going for active returns, or Alpha with your investments... they use multiple techniques to try to generate "very high returns". Different hedge funds will be using different strategies, and they are categorized.

If I am not mistaken, the movie the big-short has Christian Bale's character playing a hedge fund manager/analyst. it is a very hands-on fund, and costs high fees, but do they generate the highest returns? Perhaps, but like I said it is generally not accessible to the average person as there are minimum fees, and sometimes only upon invitation

From: http://www.investopedia.com/terms/h/hedgefund.asp





This post has been edited by wild_card_my: Aug 8 2017, 11:34 AM

Investing in UT through Fundsupermart saves you on the sales fees, but the high management fees are still there. it may still be your cup of tea.

in general, agents would quote you 10% annualized return for 10-year periods for equity funds. It could be higher, but depends on WHEN you are asking.

10% for 10 years
A bit not my expected ROI

bro, mind sharing more on CDS?

looks like its not for me since im just an average person
even those "wholesale" fund that require 100k minimum i also can't afford

in many cases, many public mutual customer complain hard to even out their investment due to the high sales charge
means profit is still long way
so that why smart ppl will go for FSM for the low SC for faster even thn make profit
those PB mutual agent dnt even care u make profit or not as long as they earn from your SC

uhh.. its 10% annualized return per annum ya... it's OK la for hand-off investment, but not all funds get this return. Tak percaya ask the Malaysian-based China funds investors...

What is your expected ROI btw? And which investment vehicle are you looking at. Even properties market appreciation will unlikely to reach 10% per annum nowadays and going forward, too much bleeding involved - lack of tenant, damages, maintenance fees, assessments, etc.

I dont mean to bad mouth agents, but the biggest fees come from the initial sales.. and there is little that they can do to manage your investments other than switching funds - but there is a risk of you switching at the wrong time.

My mentor Azizi Ali actually said there is a sure way to make money by staying in Unit Trust - that is by being a unit trust agent. They make a boat load (well, the successful ones)