Glad to hear that. Now UBB is offer projected return 7% ~ 9%, for limited period.

This post has been edited by wkkor: Jun 1 2021, 04:33 PM

Sounds dodgy, btw 7% return and 7% distribution is different. I think there is some misunderstanding.

If the 7% is coming from the fund to you then actually is your own money. 7% return means you invested 100 and it becomes 107 at the end of the year is 7% return.

This trust sounds like invest 100, and I get 7 the year but my value in the trust becomes 93

Is anyone able to confirm this? Thank you.

I have signed up in 2020 and your Q has me relooked at my Trust Deed. and there is no "distribution" pertaining to the investment part. It was worded as "projected profit share".

another clause wrote deed dissolution is upon full disbursement of Trust Capital in accordance with the T&C. So I guess Capital is unaffected.

so I think it is Legit la cos I have gotten the % of profit already last month

This post has been edited by kok_pun: Aug 16 2021, 12:55 PM

I have friends who have invested in these sort of Trusts for a few years already. They say they've been getting their projected returns as well.

If I had one question, I wonder how these Trusts are able to maintain such distributions/payouts given the current economic climate.

yar lor,...some trusts has subscription fees and some has stated annual fees too....(all in must generate abt 10% pa)

This post has been edited by MUM: Aug 16 2021, 10:34 PM

My guess is lending.

Exactly. In some sense, if it were as risk free as it sounds, I might as well take a loan and put it here but I also must admit my knowledge on the matter is extremely limited. Could be entirely wrong.

When you signed up for it, isn't there a prospectus? Or at least some sort of detail on how they generate their returns etc?

If they are involved in lending, I would assume that their clients could be those that are unable to obtain loans from your normal banks. Having said that, there is a high likelihood that borrowers may be even worse off in the current climate.

This post has been edited by Buyalotforgaming: Aug 17 2021, 11:45 PM

No wor. But I understand la. Since they are not governed by SC and I was told it’s conflict of interest if they market it as an investment tool

But it got something like “fixed income securities, bond etc” in the trust deed

even the local Fixed income unit trust funds managers could not generate that kind of returns

This post has been edited by yklooi: Aug 19 2021, 08:18 PM


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what I understand is that they can't do any kind of investment as there is a risk, not even bonds are allowed.

they are doing a short-term loan, with collateral up to 3 times of the lending amount.

Base on my knowledge banks that make money from interest consist about 80% of their profit.
I had done some case study on overseas banks, generally bank every dollar make more than 3 times.

so return such amount I am not surprised at all, and is normal.

From my understanding, UBB Amanah is a lender to most of the MOF approved factoring companies.

The majority of these factoring companies only support invoices that are guaranteed by either the government, or by large listed corporations like TM, meaning that the risk of a NPL is minimal (albeit, there is still a risk).

Many (I dont know a %) of companies awarded government cleaning and security contracts rely on factoring for cashflow, and there are literally thousands of these contracts.

The factoring companies can return between 18-36% p.a, so would likely borrow from UBB at between 12-14% p.a.

wow that is VERY high....

looks like most probably this invoice financing products from maybank is alot cheaper
https://www.maybank2u.com.my/iwov-resources...S_IF_EN_1.0.pdf

from Kenanga Factoring ......mentioned : Affordable legal and processing fee with low profit rate
https://kenangafactoring.com.my/
(i will assumed this low profit rate cannot be 18~36% pa or even >10%)


In the event of non-payment from the Buyer on the maturity date, the loan will be classified as past due and default interest at
BLR + 3.5% p.a. will be imposed
https://www.uob.com.my/assets/pdf/tnc/discl...r-Factoring.pdf
if at default then it is only BLR + 3.5%pa....thus if not default,.then the rate should be lower ...i guess

Scam written all over it.

Planworth and Ikhitar generally charge a 2% upfront fee for lending, plus around 1% per month until the invoice has been settled.
They lend between 80-90% of invoice value. The invoice is "sold" by the contractor to the factoring company, meaning that the government pays directly to the factoring company.
They take out what they are owed, and remit the balance to the contractor.

Contractors use these factoring companies due to their fast approval times to enable them to pay immediate obligations such as payroll and minimal collateral requirements.

Contractors have very few options, as these factoring companies can provide capital within 4 working days where as commercial banks may take 1-6 months for approval as well as requiring heavy collateral.

The products offered by commercial banks are far less suited to these objectives when compared to those companies that focus solely on providing cashflow to companies with government related contracts.

I do not know much about Kenaga Factoring, but do note that they make an effort to avoid mentioning rates on their website.

Hence, I don't see UBB being a scam, but rather they have found a niche in a particular market that can absorb a lot of capital.
I don't know who else is filling this void?

That said, an investment in UBB is not risk free.

There are potential collection issues is a contractor is bankrupted or wound up or any other situation where their accounts are frozen.

Contractors can be terminated or heavily penalized by the government for poor performance. It would be possible for a factoring company to lend more to a contractor than what they are paid (say a contractor invoices for RM100,000. Factoring company will lend 85% or RM85,000. Government imposes a poor performance penalty of 30%. Factoring company gets paid RM70,000 but has already lent RM85,000). Though this can be mitigated by having a minimum duration of factored invoices (say if it for a cleaning contract that has a monthly invoice, the factotring company can have a minimum of 12 invoice factored concurrently.

There is a potential for the government to tighten up their procurement process and only award contracts to companies with substantial cash reserves, essentially eliminating the need for factoring, and trapping UBB with excess funds that they are unable to loan.

Do your home work and know your risks.

your postings are very informative..... vour area of work? or you researched specifically on them?

Thank you for the insights. I like analyses backed with facts and figures.

Do you mind helping me out to decipher one line in my contract? I might be interpreting it wrongly. I just want to be assured that it is capital guaranteed. Investment return is secondary.

The line reads like this:

“The deed shall be determined and dissolved upon the full disbursement of the Trust Capital in accordance with the TnC of this deed”

I know there is TnC, if I fulfilled everything, then I should be getting all the capital back right?

that should be very true

Both and also an investor with UBB a couple of years back.

Based upon my analysis, I like what they do, but have never gone in as heavily as I would normally do so as there contracts are very peculiarly worded and their investments completely lack transparency.

while waiting for responses, i kay poh abit,...
i think this UBB cash trust is capital protected, only the returns are not guaranteed,....i think it did mentioned "projected"

do take note of this too,
What is the tenure of UBB CASH TRUST? Will there be any service fee involved?
The full tenure is of 3-years. A 4.5% as a service fee will be charged per annum.
http://www.ubbtagency.com/cash-trust-.html

also previously it did mention about the hefty fees for premature cancellation or early termination of tenure

This post has been edited by MUM: Aug 21 2021, 07:07 PM


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