The returns seem very consistent regardless of the market cycles.

Proceed with caution. I'm not saying that ASB is a ponzi or a scam, just that I would look further into their operations to avoid another TH scandal.

To me, it is just too consistent. They might be cooking the books by underreporting the gains in good years and overstating the gains in bad ones. Maybe they have special contracts that can reduce their upside while controlling their downside risk. I don't know, but who's the counterparty?

I don't know, I just have a bad feeling about this. There must be a catch. Not with the ASB financing mind you, with the ASB itself. Call me sour grapes, but there's this nagging feeling in me.

I just hope that everything is above board. I don't care if those depositors or the banks lose money, I worry about the economic repercussions such as the devaluing of our RM, which definitely affects everyone.

Thanks for the explanation. Which means like you said, you get the distribution as a share of what you put in. However, you don't participate in the capital appreciation of the fund's underlyings.

Do they disclose their underlying value? If so, I can see if it correlates to the market performance.

Also, this kind of investment is more akin to a bank than a typical investment fund.

One risk is that as deposits grow, there might be pressure on the distribution rate. Unless they can keep up with it by finding more solid investments. I'm also curious to know the value of deposits compared to value of their assets/investments.

Firstly, thanks for the compliment. I also greatly appreciate the discussions and information that you shared. Thanks again.

I usually don't take things at face value as I believe in finding out the truth and understanding how things work. I consider myself an armchair economist and a hobby investor.

Frankly, I have been discussing this ASB financing and PNB offerings with my financial buddies infrequently during our get-togethers. With your confirmation of their not revealing the NAV of ASB, it seems like it works like a high coupon sovereign bond.

If the fund managers can continue providing the returns, then everything is good. I'm just wary of the fact that if they can't, and things go south, the fallout may be devastating to our economy especially our ringgit. High returns mean nothing if there is no value to the currency.

Some risks that I see.
1) PNB has 98%(!) invested locally, with 70% in the stock market and equities, representing 10% of the market cap of our local stock market! (Source: https://www.theedgemarkets.com/article/pnbs...e-grows-rm279b). If our economy slows down and if ASB is unwilling to reduce their distributions, the only way is for BNM to increase liquidity which will have an adverse effect on our currency. The fund size is RM279b (as of Mar 2018), which is more than half the size of BNM's international reserves (USD1=RM4.14). As you and I know, our stock market performance is practically flat past 5 years (excl. dividends) and is even underperforming regionally YTD. That's why after seeing your table of the distribution history, warning bells went off in my mind. Either the fund managers are oracles that can time the market, trading with insider info or something fishy is going on. I tend to believe the latter two.

2) The push for ASB financing. This is increasing liquidity by borrowing from banks and putting the faith on the people. In other words, use future money now from private banks, in the faith that the people will work to repay it and get rewarded. This is all good except that there is crazy pressure on PNB to continue delivering market-beating returns. And since ASB is so liquid, it could also be its downfall in case of a bank run of sorts. And if PNB can sorta "guarantee" these kinda returns, why don't they cut out the middle man (aka bumis) and just borrow from private banks? Yeah, this will then look bad on the affirmative action part, but it just seems inefficient to me as an economic-minded person. This is the main reason we (my friends and I) feel there must be some risk we don't know.

All in all, just my two cents. I really hope that everything is above board and PNB is truly doing an amazing job (nothing short of a miracle) to have such market beating returns year in year out (for 40 years mind you). I, myself have a small fortune in ASM and ASW2020 but the big bulk of my investments are in the global markets (non RM).