If you reinvest your distribution, your avearge unit cost will be lowered down.

how come the the gross and net dividend distributed such big difference, eg.
dividend select fund gross is 5.5cents, but net seems like 3.75cents only. only 70%??
yes, actually nth to celebrate about, last time i already posted this question, no financial benefit to share holders.

just to show ppl they're earning money, thats all.
i dont really get this, why say if reinvest then average cost lowered down?
do you mean:

if initially i invest RM2500, for 10000unit, average cost RM0.25, then i reinvest the dividend to get extra 500units, then my average cost becomes RM0.238?(average cost = Rm2500/10500units)

if thats the case, its the same as deduct the dividend amount received from your initial investment of RM2500, also can lower down ur average cost right?

It depends, if at the time of reinvest, the NAV is higher than your initial purchased price then you average up rather than average down.

I think no matter what's the next day's NAV is, the unitholder will be able to average down the cost, assuming the holder does not add in any extra $$, so any extra units will be cost averaged down.. For eg.,

Before distribution:-
Rm1000 invested, 4000units credited, cost per unit is 0.25

After distribution:- (assuming 1sen nett distribution, assuming RM0.30 is the next day's NAV)
Rm1000 invested, Rm40 distribution, extra 133.33 units credit, cost per unit is Rm1000/(4000+133.33) = 0.2419

correct ar? 

how come the the gross and net dividend distributed such big difference, eg.
dividend select fund gross is 5.5cents, but net seems like 3.75cents only. only 70%??

It depends, if at the time of reinvest, the NAV is higher than your initial purchased price then you average up rather than average down.

you get 3.75% only?

They want to give out distribution each time they can, although basically to normal investors has nothing beneficiary, but to the fund house, they can use the distribution history to lure new investors. They probbaly will say to future potential investors: look our fund giving out 10 cents last year, which yield better than FD. A lot of newbie and non-investment savy person will be tempted in it, just by looking the past or the history.

ya, sorry for the previous post, forget there is no cash involved, my mistake.

Apart from being taxed, the fund also got trade yesterday. It's a combined effect of NAV adjustment after distribution and trading day performance (as of 3 December 2007 which I assumed to be UP).

Correct me if I'm wrong.

Yes, distribution or not has not much effect. It is still back to square one unless for cash flow situation.

However, unit split is even more meaningless compared to distribution. Nothing is changed in unit split, just some psychology feel 'more' about the unit held, in fact, value or NAV won't have any effect.
I knew unit split generally will be implemented if NAV increase quite signficantly. For example a fund NAV increase from RM1 to Rm2, generally fund house will opt to split it let say 1:2 and make the NAV back to Rm1.00. But in fact, whether got unit split or not, it is actually carrying no real meaning as you still have RM2.00 in total whether got split or not.

What's matter is the NAV incremental over the time which mean its portfolio is making money over the time.

i saw someone quoted the net distribution, very far diff from gross distribution, thats why a bit curious.
and also, today if u look at publicmutual website for price, PDSF only corrected by about 3.7cents, while PIF corrected by 9cents.
thats why i think the 3.75 distribution is correct.
dividend distribution got tax one ar? then how come like PIF still get about 9cents out of 10cents(90%) but PDSF only get about 3.75 out of 5.5 (only about 70%)
most funds dont move much yesterday, doubt if PDSF posted major gain to cover such big margin of correction.

do let me know if u know anything about it. tq

Anyone know about PM China attikal fund???
Seems very attractive...
What if the economy crises ?? Will we get the same return too??

I understand Unit Split has totally no meaning to investors. For me, I don't need cash income every year from distribution. And distribution will be taxed. So, for me, I prefer fund manager to do unit split compared to distribution. This is in my case only.

Unit Split and distribution is used to lower the fund price to make the fund price looked like more attractive. This is the marketing strategies by fund managers.

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Added on December 5, 2007, 11:43 am
I don't think PDSF gross distribution is 5.5%. We can see the adjustment is around 3.5% only including the increase of fund price that day, as most of the funds increase that day.

From the memo that I receive, the gross distribution of PDSF is 3.75% only. This is different from the Public Mutual website announcement...

thats why i'm not very sure about the situation, quoted from website of PM, as well as news in the EDGE, PDSF has a gross distri of 5.5cents, compared to the adjustment of 3.5cents+-, pretty high diff already, nearly 30%. compared to the other funds such as PIF, only 10% diff.

Guess that they have corrected the article.

Previously when I quoted the article, it was at 5.5 cents per unit.

FYI...distribution will be subjected to tax. Same as this time.

Another good news for everyone...some funds has been reopened...which are:

1) P Ittikal Fund
2) P Enhanced Bond Fund
3) Public Bond Fund
4) Pulic Islamic Bond Fund

I need some opinion guys. it might sound silly but please give me your 2 cent. i plan to topup in P Ittikal but i got it at a relatively low price at around 0.6. if i were to top up now it will increase my average cost right? so is it advisable? or i did i get the whole idea wrong