Distributions makes no difference whatsoever to the total value of the fund.

It's pointless to know when distributions happen, apart from the annoying need to take it into account when looking at fund performance.

This post has been edited by howszat: May 24 2008, 03:35 PM

From a practical investor perspective, the total value is the same - therefore it is pointless.

With distributions, you cannot take prices at two points in time and compute a percentage figure. Many Fund managers don't tell you what the distribution is and when it happens. Those who do tell you (ie for investors), it is often much later after the fact. Therefore it is annoying.

So, which bit is wrong?

This post has been edited by howszat: May 24 2008, 03:49 PM

If I reinvest the distributions, it is with zero cost, agreed. On the other hand, for a fund that does not give distributions, it is also zero cost. The total value is the same, there no additional costs in either case - so what's your point?

I disagree with the "you get more units with cheaper cost". The total number of units is irrelevant. It is the total amount in $ terms that matter. A 1000 units x RM1 is the same as 2000 units x RM0.50. Same total value - nothing is cheaper or more expensive.

I disagree with the "Reinvest your div will allow you to enjoy compounding effect". If I have RM1000 to start with, and RM1000 to finished with after distribution, there is no compounding effect in play at all. It's not like FD where you start with RM1000 and end up with RM1037 and you start earning interest on the RM1037.

It affects the calculation in that you can no longer compute the percentage based on the price figures alone. It's annoying because I don't want to run to the agents each time. Guess what, even agents don't know until the Fund manager announces it. And not all funds operate the way PM does.

It's not hard, it doesn't require rocket science, it's not the end of the world. Just a little annoying.

It is still pointless. You can easily just withdraw some units if you want pocket money.

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Added on May 24, 2008, 4:47 pmYes, your understanding of how UT works need adjusting.

This post has been edited by howszat: May 24 2008, 04:47 PM

Units have nothing to do with it - it is the total value in $ that is relevant. The total value is decreased whether you take out the distribution/dividend payout, or withdraw some units - if that's what you want to do.

As already explained, the next dividend entitlement (or any dividend entitlement) does not affect the total value of the investment, so it's really pointless to even talk about it.

Yes, this distribution/split thing is useful in making UT unit prices and share prices look "cheap" and works quite well.

However, somebody forgot to tell Warren Buffet who still has his Berkshire Hathaway shares listed at US$123,970/share.

Bond/Fixed Income funds have been dropping badly recently.

* Public Bond Fund
* Public Islamic Bond Fund
* Pb Fixed Income Fund

Anybody got any clues why?

Surely the older funds have already priced in whatever losses they have incurred?

Which means that for someone entering now, the consideration is what the funds currently hold in their portfolio and their future potential, and not whether it's 'old' or 'new'?

I believe ASN is similar to UT, but ASB (and ASW and a few others) are capital guaranteed.

The guaranteed funds at those selling at RM 1.00 per unit, whereas the UT-like ones are quoted at NAV per unit which varies on a daily basis, and can go minus like many of them currently are.

The guaranteed ones stay at RM 1.00 NAV, and gives out real dividends, and not fake ones like UT

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Added on June 13, 2008, 11:50 pmYou also need to catch them before the offer period closes which in this case was 7th May.

This post has been edited by howszat: Jun 13 2008, 11:50 PM

I actually used this as one of the indicators (in a converse way) to sell off a fund not long ago. The fund was doing poorly, and the top 3 or 4 were the same for at least nine months, and the new ones entering the top 5 were also moving backwards. Whereas similar funds with the same objectives were doing much better. I decide to cut my losses. It may be pure luck, but the same fund has done even worse since then.

I also find it useful when deciding to buy a fund as it gives some idea about the fund and also whether to keep/sell the fund in the longer term. And it probably takes up less resources than 5 minutes of kopitiam postings.

This post has been edited by howszat: Jun 19 2008, 02:54 PM

The thing is with sector-specific funds is that they normally fall into the aggressive categories which means the fund can either do very well, or do very badly. And because fund managers are constrained by what they can invest in or out of, this potentially makes things worse when times are not good.

While Telco may sound promising, it is not necessarily reflected in the share price. A good example is China Mobile.

It's a case of investor beware, a lot more so than say a balanced fund.

Bond funds are sensitive to the possibility of interest rate rises. Recently, they all dropped 3-4%. Considering they took 1 year to rise about 3%, the drop is huge, and it means that all(?) the bond funds are now about minus 1-2%.

I have some bond funds, and as soon as they recover a bit, I am going to switch them to cash management funds. But I may have to wait a while.

Past performance is no indication of future performance. In particular, if you look at the performance over the past 10 years, it has never dropped like it has done over the past month or so. The conditions/assumptions are no longer the same. High oil prices, and hence inflation and the possibility of increases in IR is not going to go away.

On the other hand, if you stick with bond funds out to the maturity dates, you will be less exposed to the fluctuations in between. Then again, if you have a long term view, I was told equities would outperform bonds.

No right or wrong. Just a different perspective.

I'm no expert on bond funds either, but if you look at the returns chart for the past year, all the PM and PB series of bonds funds are showing negative returns. This is not just PM either - bond funds by other Fund managers are showing the same thing. Generally safer yes, but they can also go negative.

Not sure how you got the performance figures. From the 10-year charts, they show:

Public Ittikal Fund: 246% = 24.6% per year.
Public Bond Fund: 106% = 10.6% per year.

Which is a bit more than 2-3% per year?

So you were talking about before-compounding figures. I wasn't sure because they were not correct. But I take your point about equities being a 2-3% higher than bonds.

But that's the thing you see - per annum before compounding, the difference may seem rather small, but since we are talking about 10 years, the difference is magnified and you can easily see that by looking at the "simple" returns:

Public Ittikal Fund total for 10-yrs: 246%
Public Bond Fund total for 10-yrs: 106%

The few percent per year has turned into 246-106 = 140%. So you were actually thinking backwards into the before compounding effect, when the correct approach should be to look at the after compounding effect.

My UT consultant tells me to take a long term view when it comes to equites, and not just look at the past 1 year. Your consulting advice wherever it came from must be telling you something different.

To say "NEVER made any negative returns for the full financial year" is just marketing hype. They are currently showing negative returns for the past year. There is nothing to suggest that when the financial year comes around, things are going to magically change.

So, if bond funds can go negative, and under-perform equites for the long term, why not just put your funds into FD (or cash-management/money-market funds) for the short term, and equity funds for the long term? Not expecting an answer here, because it is going to depend on personal circumstances.

Hey, ultimately it is up to each individual to make up their own mind. Good luck with your investments.

Past performance is no indication of future performance. Which means, you can't selectively pick a period as being more "reflective" of the future than any other period. As well, things have changed, in particular China and India were not significant factors in the past as they are today and will be tomorrow. And if I were to throw buzzwords around, I should also include Brazil and Russia as in BRIC.

Let's try another question, shall we? "Would you rather see a return of +3.7% (in FD) or a return of -3% in your portfolio?".

I do take your previous points about bond funds, and how they have a role to play in an individual's portfolio. And don't worry, I am also familiar with blardy consultants marketing hype. Thanks for your concern.

Any fund that has "China" in the name. Will be volatile, so you need to have a longer term view.

Is Public Mutual Online restricted to PM Funds only? Or applies to PB Funds as well?

How long does the application for Public Mutual Online take?

PM is making a good start with PM Online.

Still missing are online Switching and Redemption services. They did say it's coming -- in "future". Once these services are available, the next logical step is to reduce the service charge for those doing transactions online.

Some may still prefer the personal touch and that is fine - they can pay 5.5% for the privilege.